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Decoupling of emissions from economic growth in MENA

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BROOKINGS’ FUTURE DEVELOPMENT published this article on how the MENA countries should kick-start the decoupling of emissions from economic growth in their region. Here it is.

How to kick-start the decoupling of emissions from economic growth in MENA

By Martin Philipp Heger, Senior Environmental Economist – World Bank and Lukas Vashold, Ph.D. Student – Vienna University of Economics and Business

The burning of organic materials (such as fossil fuels, wood, and waste) for heating/cooling, electricity, mobility, cooking, disposal, and the production of materials and goods (such as cement, metals, plastics, and food) leads to emissions. This affects local air quality and the climate. In a recent blog, we showed that the Middle East and North Africa region (MENA) lags behind all other regions in decoupling air pollutant emissions from economic growth.

Particulate matter with a diameter of less than 2.5 micrometers (PM2.5) is the air pollutant associated with the largest health effects. MENA’s cities are the second-most air-polluted following South Asia; virtually all of its population is exposed to levels deemed unsafe. In 2019, exposure to excessive PM2.5 levels was associated with almost 300,000 deaths in MENA and it caused the average resident to be sick for more than 70 days in his or her lifetime. It also carries large economic costs for the region, totaling more than $140 billion in 2013, around 2 percent of the region’s GDP.

A good understanding of the emission sources leading to air pollution is necessary to planning for how to best reduce them. Figure 1 shows that waste burning, road vehicles, and industrial processes accounted for around two-thirds of PM2.5 concentrations. Electricity production is also a significant contributor, most of which is used by manufacturing and households.

5 PRIORITY BARRIERS AND OPPORTUNITIES FOR POLICY REFORMS TO KICK-START DECOUPLING

A forthcoming report titled “Blue Skies, Blue Seas” discusses these measures, alongside many others, in more detail.

1. Knowledge about air pollution and its sources is limited, with sparse ground monitoring stationsDetailed source apportionment studies have only been carried out for a few cities within the region, with results often not easily accessible for the public.

Extensive monitoring networks and regular studies on local sources of air and climate pollutants are foundational, as is making results easily accessible to the public (e.g., in form of a traffic light system as is done in Abu Dhabi). This will empower sensitive groups to take avoidance decisions, but also nurture the demand for abatement policies.

2. MENA’s prices for fossil fuels and energy (predominantly from burning fossil fuels), are the lowest in a global comparisonFor example, pump prices in MENA for diesel ($0.69 per liter) and gasoline ($0.74 per liter) were about half the EU prices and less than two-thirds of the global average in 2018.

MENA’s heavy subsidization of fossil fuels, whether that is at the point of consumption or at the point of intermediary inputs in power generation and manufacturing, makes price reforms essential. Aside from incorporating negative externalities better, lifting subsidies also reduces pressure on fiscal budgets, with freed-up fiscal space being available to cushion the impact for low-income households. There have been encouraging steps by some countries such as Egypt, which reduced the fossil fuel subsidies gradually over the last couple of years, leading to significant increases in fuel prices, which in turn had positive effects on air quality.

3. Underdevelopment of public transportlow fuel quality, and low emissions standards drive high levels of emissions from the transport sector. In MENA, the modal share is often heavily skewed toward the use of private cars; when public transportation is available, it has a low utilization rate in international comparison.

To support a shift in the modal share toward cleaner mobility, it is imperative to invest in public transport systems, while making them cleaner and supporting nonmotorized options such as walking and biking. Cairo’s continued expansion of its metro system has been effective in reducing PM pollution and other MENA cities have also invested heavily in their public transport infrastructure, moving the needle on improving air quality. Furthermore, it is also important to raise environmental standards, both for fuel quality and car technology, together with regular mandatory inspections.

4. Lenient industrial emissions rules and their weak enforcement. The industrial sector is characterized by low energy efficiency standards, also due to the low, subsidized prices for energy mentioned above. MENA is currently the only region, where not a single country has introduced or is actively planning to introduce either a carbon tax or an emission trading scheme.

Mandating stricter emissions caps, or technology requirements, together with proper enforcement and monitoring is crucial. Incentivizing firms to adopt more resource-efficient, end-of-pipe cleaning, and fuel-switching technologies are additional crucial means to reduce air pollution stemming from the industrial sector. A trading system for emissions could either target CO2 emissions, or air pollutants, such as the PM cap-and-trade system recently introduced in Gujarat, India. Such a system should target both the manufacturing industry as well as the power sector.

5. Weak solid waste management (SWM) is a major issue in MENA. Although the collection of municipal waste has room for improvement in many countries, it is mainly the disposal stage of SWM where the leakage occurs. Too often waste ends up in open dumps or informal landfills, where it ignites. Furthermore, processing capabilities are often limited, and equipment outdated, at least for the lower- and middle-income countries of the region.

Hence, enhancing the efficiency of disposal sites is critical to reducing leakage and the risk of self-ignition. To start, replacing or upgrading open dumps and uncontrolled landfills with engineered or sanitary landfills is a viable option. Going forward, recycling capabilities should be improved and the circularity of resources enhanced. For agricultural waste, the establishment of markets for crop residues and comprehensive information campaigns in Egypt showed that such measures can supplement the introduction of stricter waste-burning bans.

Kick-starting decoupling and banking on green investments hold the promise for MENA not only to improve environmental quality and health locally, and to mitigate climate change globally, but also to reap higher economic returns (including jobs). Moreover, decoupling now will prepare MENA economies better for a future in which much of the world will have decarbonized its economies, including its trade networks.

The Planet is Not Our Slave

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Umair Haque says the Planet is not our Slave and that If We Don’t Change our Broken Relationship with Nature, Climate Change is Going to Destroy Us.

The image above is of Udaimonia and Co.

Explanations:

The Planet is Not Our Slave

Pandemic. Megafire. Megaflood. It’s becoming clearer by the day, sometimes by the hour, that we live in an age of apocalypse. Twenty million are dead of Covid, and counting. “Climate change” — I mean global warming — is already making parts of places like California uninhabitable.

Apocalypse, as religious scholars will tell you, means “an unveiling.” Don’t worry, this isn’t going to be a religious post. But it is going to be one about what’s being unveiled, revealed, to us, by this age of apocalypse. That’s something elemental, profound, and worrying — about us. On the deepest level. Who are we? Who are we here to be? What is the point of us, the human species?

Something has gone badly wrong, after all. But what?

As I think about it, what this age of apocalypse is beginning to reveal is that our relationships are broken — the deepest kinds of ones. Our relationships with nature, and with each other.

The easiest broken relationship to see is the one we have with nature. We are the worst thing to happen to planet earth since the meteor which wiped out the dinosaurs. Our effect is exactly the same — mass extinction, huge climatic shifts — only slower.

Why is our relationship with nature so broken? How would you describe our relationship with nature? It’s a master-slave relationship. We exploit, dominate, abuse, and ruin. Meanwhile, nature has no rights, self-determination, or inherent worth. The problem, though, is that nature wasn’t meant to be our slave, and reducing it to a position of slavery is ushering in an age of climate apocalypse.We don’t really have one. Nature is something to exploit, abuse, and discard. It’s a resource for capitalism to plunder and despoil and for us, as individuals, to consume.

Think for a moment about how profoundly wrong that is. I have a dog, like you might have a dog. My dog is a character. He has a personality all his own. His emotional life is easily as complex as mine, if not more. He is a far better person than I am — more caring, intimate, less capable of deception and folly. He is innocent in ways I am not.

Nature is like that. It is, above all, innocent. It has done nothing to be annihilated by us. And yet we justify it with the way that we see nature. Have you ever watched the show “Naked and Afraid”? In it, people are sent into the jungle, or the desert, and they try to survive. Yet what’s remarkable about the show is that they never, ever comment on how beautiful the night sky is, or how present life seems to be, or how awareness seems to permeate all things. No — the show is an exercise in paranoia and violence, not peace and gratitude.

I don’t mean that in what you might call, derisively, as David Brooks would, a “hippy-dippy” way. It’s true that nature can be brutal. But nothing in nature is as brutal as us. By and large, nature takes what it needs to survive. A tree grows its roots into the soil, and takes what water it needs to reach towards the sky. The animals drink from the lake — but they don’t try to take the whole ocean.

Only we do that. We’re gaining some kind of small awareness, these days, of how wrong colonisation and slavery were. Whose land was it? It wasn’t ours. But the native peoples, most of them, would have told you, and would still tell you: it wasn’t theirs, either. It was for life. All life.

My dog, a city dog, finds himself in the suburbs. And he’s baffled by human property rights. Totally baffled. Dad, why is that the neighbour’s yard? Who made this arbitrary line? How come that tree “belongs” to us — and this one, to them? Who made these crazy rules?!

The answer is: we did. We carved the world up into property, and then kept on carving it. Empires became nations. Slaves became peasants. But who does the world really belong to?

Nobody and everybody is the answer. The world belongs to all of us, and all of us really means all of us. Not just human beings. And so when I say our relationship with nature is broken, I mean it in not just intellectual ways, but pragmatic ones, too.

Why can’t we save the world’s ecologies? Take the example of the Amazon. It’s a net carbon emitter now, having been clearcut into oblivion. That happened because it was privatised and sold off. Capitalism and human property rights again.

We have to really learn to coexistWe can’t do that under the black spell of capitalism and property rights. It begins with the assumption that everything “belongs” to us, the human species, and the only question is which human gets it. Bezos? Zuck? You? Me? Capitalism’s assumption is that everything in the world is a commodity which belongs to human beings, for them to consume.

But we can’t survive as a civilisation that way. We have already consumed too much — several planet’s worth. At this rate of consumption, global warming will proceed even more apocalyptically. This? Megafire and megaflood? California and Canada on fire? This is one degree of warming, barely that. At two degrees, entire regions of the planet become uninhabitable. At three, the water turns to poison and the soil to dust. You don’t want to know what happens at four, which is that it automatically hits five, thanks to self-reinforcing feedback — it’s enough to know that most life as we know it can’t survive.

And so our civilisation’s systems collapse, as they’ve already begun collapsing. Air, water, food, medicine — all these things are becoming harder and harder to get. Tried to buy furniture or electronics recently? Not easy, is it? But this is just the beginning. Collapse of an incredible kind — history’s worst — happens in mere decades on the course we’re on. By the end of the century — that’s one human lifetime from now — the planet is unlivable for most life as we know it.

Do we want to be that being? The walking apes who destroyed the planet? The ones who were as destructive as the giant meteor which wiped out the dinosaurs? In geological time, we’re the same thing. A meteor happened overnight — we’ve been around for 300,000 years. Big deal — same difference. The earth will survive us. But we will have been a stain, a black memory, a fatal mistake of evolution.

We need to rethink our relationship with nature. And it needs to happen nowLet me give you another example.

Ever since I got Snowy, I find it difficult to eat meat. I’m not a saint, and I was a rank ignoramus before. Now? I see a little creature just like Snowy, full of character, emotion, personality, life, when I eat meat. I still hunger for it, on some physical level. But morally, emotionally, mentally? I’m repulsed by this act of taking a life needlessly. I feel a terrible sense of shame and guilt.

Who’s innocent? If we think about it, the only forms of life on planet earth which are pure, in the sense that they are genuinely nonviolent, are plants and some forms of bacteria. Plants take in sunlight — something inert. Some bacteria can feed on minerals. These are the only two beings on planet earth who do not need to consume living things in order to survive.

The rest of us? We’re trapped in a kind of living nightmare. We have to kill in order to live. We have to literally take life in order to have it. We have to eat something, consume it in the most naked way, in order to breathe.

This is a horrific place to be, if you think about it. It’s no wonder that it’s easier for us to pretend that we’re not doing terrible violence as we walk the well-lit aisles of some cheery grocery store. And yet that cheery grocery store is full of a false happiness precisely because it is the front for a vast machinery of death. How many animals does it take to feed us? Trillions.

This relationship, too, has to change. We have to consume far, far less, if we want to go on surviving as a civilisation now. That change probably has to begin with what we literally eat. The way that we eat, too, is symbolic of how we consume in generalMindlessly. Thoughtlessly. Selfishly. Stupidly.

The ancients had a far, far more mature relationship with nature than we do. They consumed what they needed, and drew the line there. They used all of what they took, in gratitude. They had a profound sense of justice towards nature.

Why? Because they understood they were at nature’s mercy. We don’t. We think we’re above nature. Still think that way, though? Or has that conviction been shaken, by the last year or so, of mega fire and mega flood?

Nature’s trying to wipe us out. Wouldn’t you, if you were her? I would. We’re the worst thing to happen to the rest of life on this planet.

Why do we think we’re above nature — so far above it, that we can take as much as we want, exploit it, abuse it, kill it off?

This mistake goes back. Way back. To the Enlightenment, or monotheistic religion, or both, take your pick. I have religious cousins — very religious ones. Their entire lives are lived to please a deity, not to coexist with anyone or anything else. When they see Snowy, they have a strange reaction — they think he’s dirty and unclean. Not just physically, but existentially.

They don’t even care that this is offensive to me, because, well, I adore the little guy. For them, it’s salvation that matters. Why do they think Snowy’s existentially unclean? Because their monotheistic religion teaches them — as all of them do — that animals don’t have souls. So where do animals go, in this scheme of things? Well, either to hell, or nowhere, because they never existed at all.

It’s patently ridiculous to tell me that my best friend doesn’t exist. That he doesn’t have a soul. Of course he exists — he’s sitting right next to me. Of course he has a soul — it’s a bigger soul than most people I know, full of laughter and grace and courage. Think of how brave the little guy has to be to live with us. He’s ten inches tall.

Soul? I don’t know anyone braver — or more loving — than our dogs, my friends. And yet they tell me that the animals are going to hell.

Are you kidding me? How can you believe that? I’m sorry if you’re religious, but I have to draw a line somewhere. An ideology which says: “all the countless trillions of creatures on this planet except you are not really worthy” is basically fascism. I’m sorry, and there, I finally said it.

Monotheistic religion began this strange way of thinking. The ancients didn’t think this way. For them, not only did animals have souls, but all of nature did. Greeks were just of many ancient cultures to deify nature. The Egyptians did too. Most ancient cultures had such an intimate relationship with nature that “becoming” an animal, in a vision, with the help of a hallucinogen, was considered something divine, something elevated — not something subhuman and degraded, like we do. That’s telling. Of how broken our relationship with nature really is.

The Enlightenment continued the mistake monotheistic religion had made, of subjugating nature, of degrading it. The Enlightenment picked up where monotheistic religion had left off. Animals couldn’t “reason” and employ “logic.” And therefore they were inferior. Enlightenment thinkers loved to build hierarchies, and in them, human beings — “white” ones, because they’d just invented the idea of “race” — were on top, the most “rational” of all. Below them came other “races”, “yellow”, “red”, “black”, and so on.

But there are no yellow or red people, for Pete’s sake. Enlightenment thinkers at this point were literally making things up. What a stupid, stupid tragedy that we still believe them.

But their hierarchies didn’t stop there. Below the inferior “races” came the “animals.” In descending order of reason, too. And since then, that’s the way we’ve come to see the world.

The more “rational” a being is, the more they deserve dominion, power, and control.

Only now, that entire worldview is being revealed as a lie — in a kind of grand, morbid, ironic joke. What was “rationality,” to Enlightenment thinkers? It was self-advantage, basically. Being able to amass and acquire and outwit. It wasn’t just putting cause to effect, but the idea that all that could be employed in profit. Hence, capitalism was the great outcome of Enlightenment thinking.

But if rationality is the maximisation of one’s own advantage — then the ugly endgame is before us nowWhat kind of world does that form of “rationality” lead to? A world where Bezos or Zuck could vaccinate the entire planet — but don’tA world where billionaires own the entire American working and middle class, keeping them in perpetual debt. A world where the human “race” goes on consuming as much as it can, as fast it can — even if destroys its own civilization.

“Rationality” of this form — consumption maximization — turns out to be the most irrational thing of all. Short-sighted, narrow-minded, foolish. The ancients knew it. They weren’t dumb, they just weren’t interested in this way of thinking. They saw where it would lead, which is to human beings acting like locusts, like viruses, like dishonourable and mindless things. Even locusts and viruses have limits to their appetites. Do we? The ancients did not want to go down this road. They saw where it would lead. Nearly every ancient contains a stark prohibition against “rationality” as selfishness and consumption maximisation, as materialism and invididualism — most have complex norms against this mindset. Just think of complex forms of egalitarianism like gift economies or moral codes like Ubuntu.

We are at the end of this way of thinking. And that’s a good thing. Because the price has been steep. Regarding nature as something inferior, stupid, worthless — meat to be consumed — has had a terrible price for us, too. We’ve grown alienated from nature. Our own nature.

What are we? Above all, we’re social beings. We’re not the lone-wolf apex predators that American pseudo-science makes us out to be. We can try to be that, which is what American culture wants everyone to be, but we’re not happy that way. We’re not happy, fulfilled, or ennobled as idiots who carry guns to Starbucks and consume everything in sight with abandon. We just end up like Americans — lonely, dumb, angry, and self-destructive.

We need to become very different kinds of people now. Full of gratitude and love and respect for all of lifeAll of it. From the tiniest creature to the greatest. Rationality can’t be the measure of a creature, because it’s only made fools of us. It’s only led us to self-destruction and ruin, the idea that a person, a nation — or a species — should only be in it for themselves, their own gain, profit, advantage. We need to rethink our relationship with nature from that perspective. It needs to become one of investment, not consumption, which means giving back, nurturing, nourishing, protecting, guiding, coexisting — not abusing, violating, and dominating.

Can we be that thing, that being? I don’t know. Nobody knows. The ancients and the primitives wanted to be those beings. But modern societies came along — and killed them off. With efficiency, with productivity. By instilling this insatiable appetite for mindless consumption, TikTok style. Maybe, in the end, that’s what we’re destined to be, by our primate brains.

This century tests all that. Who we really are, can be, want to be, in this world. The truth and essence of us.

So far, though, I have to wonder — are we even trying to be any different from the violent, stupid, selfish, self-destructive, walking apes capitalism and patriarchy and empire, all those old systems of domination, violence, and violation, want us to be?

Umair
September 2021

APICORP to allocate $1bn towards green energy

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By virtue, or by follow-up, the Oil Producing Countries of the Golf are trying to rush into the transition to green development. Here is a good example. Apicorp to allocate $1bn towards green energy as described here extends to also ‘introduce green and sustainability bonds in the coming period with the aim of accelerating the adoption of sustainable business models within the energy sector whilst providing incentives to pursue energy diversification and sustainability practices.’


The above image is for illustration and is of The National.

APICORP to allocate $1bn towards green energy

DAMMAM, The Arab Petroleum Investments Corporation (Apicorp), an energy-focused multilateral development bank, plans to allocate $1 billion towards green energy projects and sustainable energy companies over the next two years, particularly in the MENA region. 

This is with a view to concomitantly measure the ESG footprint of all its assets by end of 2023 through active engagement with its stakeholders. 

Unveiling its new ESG policy framework, Apicorp aims to support Energy Transition in its member countries and beyond.

Currently, green assets comprise more than 13% of the multilateral development bank’s overall portfolio – equal to around $550 million in loans and direct investments, a figure which has more than quadrupled over the past five years. 

The new framework also includes a robust due diligence toolkit to measure the ESG impact when making financing and investment decisions, with a focus on supporting the proliferation of renewable energy sources and low-carbon technologies as well as forging more strategic partnerships to promote the sustainability agenda.

Dr Aabed bin Abdulla Al-Saadoun

Additionally, Apicorp will look to introduce green and sustainability bonds in the coming period with the aim of accelerating the adoption of sustainable business models within the energy sector and providing industry players with incentives to pursue energy diversification and sustainability practices.

Commenting on the ESG policy framework, Dr Aabed bin Abdulla Al-Saadoun, Chairman of the Board of Directors of Apicorp, said: “As the world continues to experience unprecedented change, Apicorp recognises the importance of our role, our impact and our responsibility to tackle environmental and climate change challenges within our member countries, partners and wider stakeholders. We want to support a transition to a low-carbon, climate-resilient economy by mitigating risks across our operations, supply chain and client transactions by embedding sustainable principles in our business practices. We embark on this journey with the reassurance that all of our member countries are signatories to the 2015 Paris Agreement and participants at COP26 to be held in Glasgow later this year.”

Dr Ahmed Ali Attiga, Chief Executive Officer of Apicorp, said: “At Apicorp, we want to lead by example when it comes to transitioning to more sustainable energy sources. Encouraging other partners in our ecosystem to be more mindful of their environmental, governance and societal footprint is therefore integral to our strategy moving forward. As a multilateral development bank with exposure to myriad industries within the energy space, we have the added advantage of being able to measure the overall impact more accurately across the regions in which we operate. Equally important, we will continue to drive the ESG agenda in our member countries through our research and knowledge sharing activities, as well as our unique position in advising key policymakers within government and regulatory circles.” 

Underpinned by three core pillars – Responsible Banking and Investing, Social Inclusion and Partnerships, and Financial Resilience and Governance – the comprehensive framework is a key element of Apicorp’s strategy to formalise and institutionalise its commitment to environmental protection, social responsibility, and robust governance. It also guides how 

Apicorp will go about identifying, measuring, managing, monitoring, and reporting ESG risks and opportunities, as well as outlining criteria related to its own infrastructure, ethics and values, diversity and inclusion, and employee empowerment.

Additionally, the institution will also undertake voluntary public reporting on an annual basis drawn from the leading international standards, including the Task Force on Climate-related Financial Disclosures, The Principles for Responsible Investment, The Principles for Responsible Banking, and The Equator Principles.

TradeArabia News Service

Ditch 90% of World’s Coal and 60% of Oil and Gas

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The authors of this article on Climate change and elaborate on how to avert it through experts’ notable advice of a ditch of 90% of the world’s coal and 60% of oil and gas to limit warming to 1.5°C. Would it be feasible if some of the MENA countries economic life sustenance depends on fossil fuels related revenues? Here is what these authors are saying.

Climate change: ditch 90% of world’s coal and 60% of oil and gas to limit warming to 1.5°C – experts

Daniel Welsby, UCL; James Price, UCL, and Steve Pye, UCL

Global mean surface temperatures reached 1.2°C above the pre-industrial average in 2020, and the Intergovernmental Panel on Climate Change warned in its recent report that Earth could hit 1.5°C in as little as a decade. The 0.3°C separating these two temperatures make a world of difference. Scientists believe that stabilising our warming world’s temperature at 1.5°C could help avoid the most serious effects of climate change.

Fossil fuels such as coal, oil and natural gas are the source of just over 80% of the world’s energy. Burning them accounts for 89% of human-derived CO₂ emissions. To avert catastrophic warming, the global community must rapidly reduce how much of these fuels it extracts and burns. Our new paper, published in Nature, revealed just how tight the world’s remaining carbon budget is likely to be.

In order to hold global warming at 1.5°C, we found that nearly 60% of global oil and fossil gas reserves will need to remain in the ground in 2050. Almost all of the world’s coal – 90% – will need to be spared from factory and power plant furnaces. Our analysis also showed that global oil and gas production must peak immediately and fall by 3% each year until mid-century.

Fossil fuels still provide most of the world’s energy. Rudmer Zwerver/Shutterstock

Even meeting these stringent limits may not be enough on its own to stabilise global warming at 1.5°C, however.

That’s because we based our estimates on a carbon budget compatible with just a 50% probability of limiting warming to 1.5°C. Our model simply could not be pushed to a greater chance of achieving the 1.5C target because it was already at its limit, given our projections of fossil fuel demand in the near future.

Our analysis also relies on the large-scale deployment of technologies capable of removing CO₂ from the atmosphere sometime in the future. By 2050, our scenario expects around four gigatonnes a year will be being captured by so-called negative emission technologies. There remains a lot of doubt about whether it is even possible to sufficiently scale these technologies up in time.

So, to aim for a better chance of achieving the Paris Agreement’s goal and to lower the risk of relying on as yet unproven technologies, we argue that our estimates of how much of the world’s fossil fuels cannot safely be extracted should be treated as cautious underestimates. The world may need to be even more ambitious.

Fossil fuel rationing

We estimated how much fossil fuel production in each region must fall and how fast based on a global energy system model. We allocated the remaining shares of fossil fuel production allowed within the budget based on the costs and carbon intensity of producing different oil and gas assets, and how cheap low and zero-carbon technologies are in different parts of the world.

Our analysis showed that total fossil fuel production is limited by a global carbon budget. Production growing in one region of the world will require a decrease in another to keep the global trajectory pointing downwards. A mechanism such as the Global Fossil Fuel Registry – a public database of all known reserves – could provide the necessary transparency for an international effort, with the cooperation of governments and fossil fuel producers.

The US and Russia sit on half of the world’s coal but must leave 97% of it in the ground. Australia, which recently pledged to keep producing and exporting coal beyond 2030, would need to keep 95% of its reserves underground. Oil-producing states in the Middle East must not extract around two-thirds of their reserves, while most of Canada’s tar sand oil must not be burned, along with all of the fossil fuel buried beneath the Arctic.

Our analysis suggests that many countries will need to move out of fossil fuel production relatively quickly, which raises concerns about how the transition can be managed fairly. Countries such as Iraq and Angola have a high dependency on fossil fuels for government revenues. They will need support to diversify their economies in a managed way – including financial and technological assistance to develop new low-carbon industries – and to decarbonise domestically to reduce their own reliance on fossil fuels.

The necessary energy transformation highlighted in this research will require a range of policy levers, including measures that drive down fossil fuel consumption, such as banning petrol cars or promoting renewable electricity generation, and those targeting production itself, including restrictions on new fossil fuel extraction licenses.

Alliances between countries are also likely to be important to build political support for reducing fossil fuel production. The Beyond Oil and Gas Alliance, formed by Denmark and Costa Rica, has pressured other countries to halt investment in new oil and gas projects.

Phasing out global fossil fuel production at the rate suggested in our study is possible, but it will rely on some of the measures we’ve described expanding and gaining the support of large producing countries and companies – those which have benefited most from the fossil fuel era.

Daniel Welsby, PhD Candidate in Energy Systems, UCL; James Price, Senior Research Associate in Energy, UCL, and Steve Pye, Associate Professor in Energy Systems, UCL

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The Economic Cost of Climate Change

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The article on the Economic Cost of Climate Change being six times higher than previously thought, published by UCL though alarming cannot be closer to the drastic reality of today. Here it is.

Economic cost of climate change could be six times higher than previously thought

6 September 2021

​​​​​​​Economic models of climate change may have substantially underestimated the costs of continued warming, according to a new study involving UCL researchers.

Published today in the journal Environmental Research Letters, the international team of scientists found that the economic damage could be six times higher by the end of this century than previously estimated.

Projections like this help governments around the world calculate the relative costs and benefits of cutting greenhouse gas emissions. However, prior analysis has shown that the models used may ignore important risks and therefore underestimate the costs.

Currently, most models focus on short-term damage, assuming that climate change has no lasting effect on economic growth, despite growing evidence to the contrary. Extreme events like droughts, fires, heatwaves and storms are likely to cause long-term economic harm because of their impact on health, savings and labour productivity.

The study authors first updated one of the three climate-economy models used to set the price of carbon for national policy decisions, then used it to explore the impact of year-to-year climate variations and the rates of economic recovery after climate events.

The study shows that by 2100, global GDP could be 37% lower than it would be without the impacts of warming, when taking the effects of climate change on economic growth into account. Without accounting for lasting damages – excluded from most estimates – GDP would be around 6% lower, meaning the impacts on growth may increase the economic costs of climate change by a factor of six.

Yet, there is still considerable uncertainty about how much climate damages continue to affect long-term growth and how far societies can adapt to reduce these damages; depending on how much growth is affected, the economic costs of warming this century could be up to 51% of global GDP.

Study co-author Dr Chris Brierley (UCL Geography) said: “We don’t yet know exactly how much effect climate change will have on long-term economic growth – but it’s unlikely to be zero, as most economic models have assumed.

“Climate change makes detrimental events like the recent heatwave in North America and the floods in Europe much more likely. If we stop assuming that economies recover from such events within months, the costs of warming look much higher than usually stated. We still need a better understanding of how climate alters economic growth, but even in the presence of small long-term effects, cutting emissions becomes much more urgent.”

The researchers also updated the model to take advances in climate science over the past decade into account, as well as the effect of climate change on the variability of annual average temperatures – both of which increased the projected cost of climate change.

The authors calculated the effect of these changes on the ‘social cost of carbon’ (SCCO2), a crucial indicator of the level of urgency for taking climate action that calculates the economic cost of greenhouse gas emissions to society. Expressed in US dollars per tonne of carbon dioxide, estimates currently vary greatly between $10 to $1,000. However, when taking more robust climate science and updated models into account, this new study suggests that the economic damage could in fact be over $3,000 per tonne of CO2.  

“Burning CO2 has a cost to society, even if it is not directly to our wallets. Each person’s emissions could quite well result in a cost to humanity of over $1,300 per year, rising to over $15,000 once the impacts of climate change on economic growth are included,” Dr Brierley said.

While the findings show large uncertainties, the central values were found to be much higher than policymakers currently assume; the US government, for example, currently uses a social cost of carbon of around $51 per tonne to judge the costs and benefits of projects linked with greenhouse gas emissions, whilst the EU Emissions Trading Scheme, which covers power, manufacturing and aviation, recently exceeded €61 for the first time.

Study co-author Paul Waidelich (ETH Zürich) said: “The findings confirm that it is cheaper to reduce greenhouse gas emissions than it is to deal with climate change impacts, and the economic damages from continued warming would greatly outweigh most costs that could be involved in preventing emissions now. The risk of costs being even higher than previously assumed reaffirms the urgency for fast and strong mitigation. It shows that choosing to not reduce greenhouse gas emissions is an extremely risky economic strategy.”

Former UCL MSc student and study lead author, Jarmo Kikstra (International Institute for Applied Systems Analysis and Imperial College London), said: “It is very difficult to calculate the overall costs of climate change, but increased scientific evidence has improved economic estimates. Climate science on this has improved a lot over the past decade, and the improvements we made with the science do not change the order of magnitude of cost-benefit estimates.

“However, we are much more uncertain when it comes to how the economy will respond to future climate impacts. We reveal that if we look more closely at the lasting impact the climate can have on economies, we find that the costs might increase many times, depending on how much climate action we take.”

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