A practitioner's guide to a low-carbon economy: lessons from the UK

Drawing primarily on the UK experience, five practical lessons are identified for policy makers who seek to decarbonize their economies. First, decarbonization needs a solid legal basis to give it credibility and overcome time inconsistency problems. Second, putting a price on carbon is essential, but low-carbon policies also have to address wider market, investment, and behavioural failures. This in turn raises issues of policy complexity and coordination. Third, the low-carbon economy is likely to be highly electrified. Clean electricity could be a cost-effective way of decarbonizing many parts of the economy, including transport, heating, and parts of industry. Decarbonization therefore starts in the power sector. Fourth, the low-carbon transition is primarily a revolution of production and not consumption. Both supply-side innovation and demand-side adjustments in lifestyle and behaviour are needed, though the former should dominate. Fifth, the transition to a low-carbon economy is economically and technologically feasible. Achieving it is a question of policy competence and having the political will to drive economic and social change.

Policy relevance

Practically all major GHG emitters now have climate change legislation on their statute books. Given what is at stake, and the complexity of the task at hand, it is important that policy makers learn from each other and establish a code of good low-carbon practice. The main lessons from the UK are distilled and presented. Carbon policy is considered for key sectors, such as electricity, buildings, and transport, and possible decarbonization paths are also outlined. It is shown that the transition to a low-carbon economy is economically and technologically feasible. Achieving it is primarily a question of policy competence and political will. This in turn means that climate change action needs a strong legislative basis to give the reforms statutory legitimacy. Low-carbon policies will have to address a wide range of market, investment and behavioural failures. Putting a price on carbon is an essential starting point, but only one of many policy reforms.     

Post-2012 climate policy dilemmas: a review of proposals

This article assesses a wide range of alternative proposals for post-2012 international climate policy regimes. We believe that these proposals will serve as a basis for debates about how to configure post-2012 climate policy. The article characterizes and assesses the policy proposals along the lines of five key policy dilemmas. We argue that (1) many proposals have ideas on how to reduce emissions, but fewer have a solution on how to stimulate technical innovation; (2) many proposals formulate climate policy in isolation, while there are fewer proposals that try to mainstream climate policies in other policy areas; (3) many proposals advocate market-based solutions, while fewer realize that there are certain drawbacks to this solution especially at the international level; (4) most proposals have a preference for a UN-based regime, while a more fragmented regime, based on regional and sectoral arrangements may be emerging; and (5) most proposals have ideas about mitigation, but not many have creative ideas on how to integrate mitigation with adaptation.     

Reflections on the current state of global climate response

What is the significance of the 2007 United Nations Climate Change Conference in Bali? The formal outcomes, especially the ‘Bali Action Plan’, are described and commented on, along with the challenges for negotiating a post-2012 agreement in Copenhagen during 2008 and 2009. The article concludes that the outcome of the Bali meeting is insufficient when compared to the nature of the challenge posed by climate change. However, it can nevertheless be considered a success in terms of ‘Realpolitik’ in paving the way for the negotiations ahead, because some real changes have been discerned in the political landscape. The challenges for the road towards Copenhagen are manifold: the sheer volume and complexity of the issues and the far-reaching nature of decisions such as differentiation between non- Annex I countries pose significant challenges in themselves, while the dependency on the electoral process in the USA introduces a high element of risk into the whole process. The emergence of social justice as an issue turns climate policy into an endeavour to improve the world at large—thereby adding to the complexity. And, finally, the biggest challenge is the recognition that the climate problem requires a global solution, that Annex I and non-Annex I countries are mutually dependent on each other and that only cooperation regarding technology in combination with significant financial support will provide the chance to successfully tackle climate change.     

From Lima to Paris,Part 1: The Lima Hangover

A growing body of literature suggests that an economic case may exist for investment in large-scale climate change mitigation. At the same time, however, investment is persistently falling well short of the levels required to prevent dangerous climate change, suggesting that economically attractive mitigation opportunities are being missed. To understand whether and where these opportunities exist, this article contrasts macro-level analyses of climate finance with micro-level bottom-up analyses of the scale and composition of low-carbon investment opportunities in four case study developing world cities. This analysis finds that there are significant opportunities to redirect existing finance streams towards more cost-effective, lower-carbon options. This would mobilize substantial new investment in climate mitigation. Two key explanations are proposed for the failure to exploit these opportunities. First, the composition of cost-effective measures is highly context-specific, varying from place to place and sector to sector. Macro-level analyses of climate finance flows are therefore poor indicators of the micro-level landscape for low-carbon investment. Specific local research is therefore needed to understand the opportunities for cost-effective mitigation at that level. Second, many opportunities require enabling governance arrangements that are not currently in place. Mobilizing new low-carbon investment and closing the ‘climate finance gap' therefore requires attention to policy frameworks and financing mechanisms that can facilitate the exploitation of cost-effective low-carbon options.

Policy relevance

The importance of increasing investment in climate mitigation, especially in developing nations, is well established. This article scrutinizes four city-level studies of the scope for cost-effective low-carbon investment, and finds that significant opportunities are not being exploited in developing world cities. Enabling governance structures may help to mainstream climate considerations into investments by local actors (households, businesses and government agencies). While climate finance distributed through international bodies such as the Green Climate Fund may not always be a suitable vehicle to invest directly in disaggregated, local-level measures, it can provide the incentives to develop these governance arrangements.     

A new look at climate equity in the UNFCCC

Equity has been at the core of the global climate debate since its inception over two decades ago, yet the current negotiations toward an international climate agreement in 2015 provide a new and critical opportunity to make forward progress on the difficult web of equity issues. These negotiations and the discussions about equity are taking place in a context that has shifted: all countries will be covered under a new agreement; growing climate impacts are being felt, especially by the most vulnerable; and there is an emergence of new institutions and increasing complexity in the international climate regime. Innovative thinking on equity, including which countries should take action and how, is therefore essential to finalizing an agreement by 2015. A broader, deeper, and more holistic view of equity is necessary, one that sees equity as a multi-dimensional challenge to be solved across all the facets of the international climate process.

Policy relevance

This article is relevant to policy makers following the development of the United Nations Framework Convention on Climate Change (UNFCCC) Ad Hoc Working Group on the Durban Platform as it prepares the way for a new agreement in 2015. The article focuses specifically on the issues most relevant to the debate around equity in the negotiations and how that debate is evolving with the expansion of the UNFCCC. It explains the current state of the negotiations and what issues are on the negotiating table, including the fact that negotiations on equity are now much broader than the mitigation commitments, to include the possible ‘equity reference framework’, concerns relating to adaptation and loss and damage, and the need for ambition in terms of mitigation and finance support.     

National contributions to climate change mitigation from agriculture: allocating a global target

Globally, agriculture and related land use change contributed about 17% of the world’s anthropogenic GHG emissions in 2010 (8.4 GtCO₂e yr^?1), making GHG mitigation in the agriculture sector critical to meeting the Paris Agreement’s 2°C goal. This article proposes a range of country-level targets for mitigation of agricultural emissions by allocating a global target according to five approaches to effort-sharing for climate change mitigation: responsibility, capability, equality, responsibility-capability-need and equal cumulative per capita emissions. Allocating mitigation targets according to responsibility for total historical emissions or capability to mitigate assigned large targets for agricultural emission reductions to North America, Europe and China. Targets based on responsibility for historical agricultural emissions resulted in a relatively even distribution of targets among countries and regions. Meanwhile, targets based on equal future agricultural emissions per capita or equal per capita cumulative emissions assigned very large mitigation targets to countries with large agricultural economies, while allowing some densely populated countries to increase agricultural emissions. There is no single ‘correct’ framework for allocating a global mitigation goal. Instead, using these approaches as a set provides a transparent, scientific basis for countries to inform and help assess the significance of their commitments to reducing emissions from the agriculture sector.

Key policy insights

• Meeting the Paris Agreement 2°C goal will require global mitigation of agricultural non-CO₂ emissions of approximately 1 GtCO₂e yr^?1 by 2030.

• Allocating this 1 GtCO₂e yr^?1 according to various effort-sharing approaches, it is found that countries will need to mitigate agricultural business-as-usual emissions in 2030 by a median of 10%. Targets vary widely with criteria used for allocation.

• The targets calculated here are in line with the ambition of the few countries (primarily in Africa) that included mitigation targets for the agriculture sector in their (Intended) Nationally Determined Contributions.

• For agriculture to contribute to meeting the 2°C or 1.5°C targets, countries will need to be ambitious in pursuing emission reductions. Technology development and transfer will be particularly important.

     

Greenhouse gas emissions caused by the international climate negotiations

Abstract

One and a half decades of climate negotiations have directly caused greenhouse gas emissions of about 150,000 t CO₂. At prevailing market prices, making the full negotiation process greenhouse-gas-neutral ex post would cost about US$0.5 million, which is a fraction of the cost of the conferences.     

Delivering the two degree global climate change target using a flexible ratchet framework

Global climate negotiations have been characterized by a divide between developed and developing nations – a split which has served as a persistent barrier to international agreement within the United Nations Framework Convention on Climate Change process. Notable progress in bridging this division was achieved at the 21st Conference of the Parties meeting in Paris through the introduction of Intended Nationally Determined Contributions (INDCs). However, the collective ambition of submitted INDCs falls short of a global 2°C target, requiring an effective ratchet mechanism to review and increase national commitments. Inequitable distribution of additional responsibilities risks re-opening historic divisions between parties. This article presents a flexible ratchet framework which shares mitigation commitments on the basis of per capita equity in line with emerging requirements for a 2°C target. The framework has been designed through convergence between developed and developing nations; developed nation targets are based on an agreed standardized percentage reduction wherever emissions are above per capita equity; developing nations are required to peak emissions at or below per capita equity levels by an agreed convergence date. The proposed framework has the flexibility to be integrated with current INDCs and to evolve in line with shifting estimates of climate sensitivity.

Policy relevance

The outcome of the 21st Conference of the Parties (COP21) negotiations in Paris offered mixed results in terms of level of ambition and submitted national commitments. A global agreement to keep average global temperature rise below two degrees was maintained; however, current pledged Intended Nationally Determined Contributions (INDCs) are projected to result in an average warming of close to three degrees. The implementation of a global ratchet mechanism to scale-up national commitments will remain key to closing this ambition gap to reach this two degree target. How this upscaling of responsibility is shared between parties will be a defining discussion point within future negotiations. This study presents a standardized, equity-based framework for how this ratchet mechanism can be implemented – a framework designed to be flexible for evolution in line with better understanding of climate sensitivity, and adaptable for integrations with current INDC proposals.     

Who picks up the remainder? Mitigation in developed and developing countries

A fair, effective, flexible and inclusive climate regime beyond 2012 will need several political balances. Mitigation and funding will be at the heart of the agreement. The IPCC's Fourth Assessment Report indicates that absolute reductions will be needed in Annex I (AI) countries and substantial deviation from baseline in some non-Annex I (NAI) regions by 2020. Although the latter was not explicitly quantified by the IPCC, the EU subsequently proposed a range for developing countries. Sharing the burden for mitigation is essentially zero-sum: if one does less, the other has to do more. We critically examine the implicit assumption that NAI countries would pick up the remainder of the required global effort minus the AI contribution. We suggest that greater levels of ambition can be achieved by turning the formula around politically, starting from the achievable ‘deviation below baseline’ given NAI's national programmes and appropriate international support. AI countries may have to exceed the IPCC ranges or pay for the remainder. For notional levels of NAI mitigation action, Annex I has to reduce by between ?52% and ?69% below 1990 by 2020, only dropping to a domestic ?35% with commitments to offset payments through the carbon market. Given the large mitigation gap, a political agreement on the question of ‘who pays’ is fundamental. The carbon market will provide some investment, but it mainly serves to reduce costs, particularly in developed countries, rather than adding to the overall effort. Market-linked levies and Annex I public funding will therefore be crucial to bridge the gap.     

Drivers of national climate policy

Patterns of national climate policy performance and their implications for the geopolitics of climate change are examined. An overview of levels of emissions performance across countries is first provided. Substantial changes in emissions trends over time are documented, notably with GHG emissions trajectories, which are shaped less and less by the developed/developing country divide. Various patterns of policy convergence and divergence in the types of policies states implement are then surveyed. Four broad types of explanation that may account for these trends are then explored: (1) variation in the institutional form of country-level governance regimes, (2) patterns of dependence on fossil fuel energy, (3) broad systemic differences among states (specifically in their population densities, carbon intensity, and per capita incomes, and (4) variations in the traditions of economic intervention by states. The article contributes to the growing body of work on comparative climate policy, and provides a first attempt at exploring the comparative politics of instrument choice. The analysis challenges the continued importance of a North–South divide for the future of climate policy, thus reinforcing a sense of the ‘new geopolitics’ of climate change. Some of the implications of the analysis for debates about the form of future international agreement on mitigation policy are also explored.

Policy relevance

The article contributes to the understanding of the variety of institutional conditions under which policy makers develop policy and thus the constraints and opportunities for the design of international agreements under these conditions.     

Breaking the impasse: towards a new regime for international climate governance

The reality of the current international order makes it imperative that a just and effective climate regime should balance the historical responsibility of developed countries with the increasing absolute emissions from many developing nations. The key pillars are briefly proposed for a new international climate architecture that envisions replacing the current annex system with two new annexes: Annex α, for countries with high current emissions and historically high emissions, and Annex β, for countries with high current emissions and historically low emissions. Countries in both annexes would implement legally binding targets under this framework. Additionally, this proposal includes alterations and revisions to funding and technology transfer mechanisms to correct for weaknesses and inequities under the current Kyoto architecture. The proposed framework stems from a belief that a top-down, international approach to climate policy remains the most effective for ensuring environmental integrity. Given the slow rate of institutional learning, the reform and improvement of the current system is held as a more efficient course of action than abandoning the progress already achieved. It is argued that the proposed framework could effectively accommodate key equity, environmental integrity, and political feasibility concerns.     

The role of non-nation-state actors and side events in the international climate negotiations

United Nations climate change conferences have attracted an increasing number and range of observer participants, often outnumbering national delegates. The interactions between the formal and informal spaces of climate governance at the Conference of the Parties (COP) are explored by investigating why non-nation state actors (NNSAs) attend them and by measuring to what extent official UN Side Events provide relevant information for the formal negotiations. Based on primary empirical research at recent COPs, it is found that 60–75% of Side Events have related directly to items under negotiation in the post-2012 climate negotiations. In this regard, Side Events that facilitate informal exchange between stakeholders not only provide input into the negotiations but also allow issues beyond the realm of the negotiations to be discussed, reflecting the scope of climate change. Although Side Events are an effective forum to exchange ideas and network, their current format and purpose as being events ‘on the side’ does not offer a sufficient framework for coordination between the work of NNSAs and the United Nations Framework Convention on Climate Change (UNFCCC) process.     

Process matters: building a future climate regime with multi-processes

How do current processes in international climate-related institutions affect the architecture of a future climate regime, particularly various international negotiating processes related to climate change? A plausible image of future climate regime is developed to address this question. Three plausible scenarios are described for the next decade using the scenario-planning approach. Based on this, the scope for an internationally acceptable climate regime beyond 2012 is developed. The current processes under the UNFCCC, the Kyoto Protocol, and those outside the UN arena are encapsulated into three scenarios. Each scenario has a set of relatively preferable types of commitments, which differ from each other. Each process is likely to result in the establishment of one particular institution. Linkages are developed between the three institutions so that the climate regime as a whole will be environmentally effective. The three institutions are likely to converge in the long run, as countries' views on both climate change and a future climate regime converge.     

Triggering the low-carbon transition in the aftermath of the global financial crisis

An assessment of the post-Kyoto climate change negotiations, and the altered role of climate finance post-financial crisis, is presented. First, the paradigm shift of the Cancun Agreements is examined from an historical perspective and it is shown that the impasse in the negotiations, caused by the underlying over-emphasis on burden sharing reductions in emissions, can be overcome. Second, using information from two modelling exercises, it is demonstrated how climate finance can encourage the decoupling of carbon emissions from economic growth and thereby help align the development pattern with global climate goals. Third, a framework to place carbon finance within current discussions is sketched regarding both the reformation of the world financial systems and the facilitation of a sustainable economic recovery that is beneficial for North and South while addressing the low-carbon transition. It is concluded that upgrading climate finance is the key to triggering the shift to a low-carbon society and a system is proposed in which an agreed social cost of carbon is used to support the establishment of carbon emissions certificates to reorient a significant portion of global savings towards low-carbon investments.

Policy relevance

Investments that align development and climate objectives are shown to substantially lower the social cost of carbon and deliver long-term carbon emissions reductions. These reductions are greater than those contributed by the sole carbon price signal generated by a world cap-and-trade system. Carbon finance, as a part of the broader reform of financial systems and overseas aid, can help overcome the dual adversity of climate and financial crisis contexts. The carbon certificate, with an upfront agreed social cost of carbon, can be used as its instrument. The portion of the banking system that intends to reorient a significant part of world savings towards low-carbon investments could thus issue such carbon certificates. By giving carbon assets the status of a reserve currency, the system could even respond to the need of emerging countries to diversify their foreign exchange reserves and trigger a wave of worldwide sustainable growth through infrastructure markets.     

Measurable,reportable and verifiable: the keys to mitigation in the Copenhagen deal

The climate negotiations up to Copenhagen will need to elaborate on measurable, reportable and verifiable (MRV) mitigation commitments and actions as part of the future of the climate regime. The conceptual, political, scientific, financial and institutional principles for MRV are explored for (1) mitigation commitments in developed countries, (2) mitigation actions in developing countries, supported by (3) means of implementation. For developed countries, the procedures in Articles 5, 7, 8 and 18 of the Kyoto Protocol will be critical in order to ensure comparability of commitments, both in effort and compliance. Outcomes should be reportable and verifiable through Annex I national communications and in-depth review. Existing procedures could be enhanced and need to apply across Protocol and Convention. MRV mitigation actions by developing countries should result in measurable deviations below baseline. Inventories will be important to measure, and enhanced national communications for reporting. The challenge will be to make mitigation actions verifiable, and options include verification by domestic institutions working to internationally agreed guidelines. A critical distinction is to be made between unilateral mitigation actions and those with international support. MRV applies to the provision of the means of implementation, including technology and finance. Investment in technology can be measured, so that institutional arrangements for technology and finance should be aligned. Verification of funds raised at international level would be simpler than raising funds nationally.     

Building bridges to 2020 and beyond: the road from Bali

What would the shape of a realistic, yet ambitious, package for the climate regime after 2012 look like? How do we obtain a package deal starting in Bali but building bridges to a post-2020 climate regime? A fair, effective, flexible and inclusive package deal has to strike a core balance between development and climate imperatives (mitigation, adaptation, dealing with the impacts of response measures, technology transfer, investment and finance) to create bargaining space and establish a conceptual contract zone. Within a continuum of possible packages, two packages in the contract zone are identified: ‘multi-stage’ and ‘ambitious transitional’. The latter is ambitious, combining domestic cap-and-trade for the USA, deeper cuts for Annex B countries, and quantifiable mitigation actions by developing countries. It is transitional as a possible bridge to a more inclusive regime beyond 2020. Multi-stage is defined around mechanisms by which countries move through increasingly stringent levels of participation, and must be based upon agreed triggers. Our assessment of political dynamics is that multi-stage is not yet in the political contract zone. Key to this is the absence of a ‘trigger from the North’, in that the largest historical emitter must act earlier and most decisively. But progress will also depend on continued leadership from Annex B countries, as well as more proactive, incentivized leadership in the South. Agreeing on the transitional stage is the critical next step in the evolution of the climate regime. Negotiating any package will require an institutional space for bargaining, political leadership and trust, and a clear time-frame.     

对斯特恩新报告的要点评述和解读

2006年10月,英国推出的由著名经济学家斯特恩爵士领导编写的《斯特恩回顾：气候变化经济学》,从经济学的角度着重论述了全球应对气候变化的紧迫性,强调只有尽快大幅度减少温室气体排放,才能避免全球升温超过2℃可能造成的巨大经济损失,且减排成本并不高。2008年4月,斯特恩爵士再次推出一份报告,提出为实现上述目标构建2012年后国际气候制度的基本要素,这对后续国际谈判可能会产生一定的影响。通过比较分析两份报告的关系和不同特点,对新报告中国际气候制度设计和评价的基本原则,全球减排的长期目标和减排义务的分担,通过资金、技术、市场、适应等国际政策措施吸引发展中国家参与,减少毁林排放,以及政策执行和制度建设等问题进行了评述和解读,其中内涵对深入开展国际气候制度的研究和我国参与国际气候谈判有重要启发。     

对斯特恩新报告的要点评述和解读

 2006年10月,英国推出的由著名经济学家斯特恩爵士领导编写的《斯特恩回顾：气候变化经济学》,从经济学的角度着重论述了全球应对气候变化的紧迫性,强调只有尽快大幅度减少温室气体排放,才能避免全球升温超过2℃可能造成的巨大经济损失,且减排成本并不高。2008年4月,斯特恩爵士再次推出一份报告,提出为实现上述目标构建2012年后国际气候制度的基本要素,这对后续国际谈判可能会产生一定的影响。通过比较分析两份报告的关系和不同特点,对新报告中国际气候制度设计和评价的基本原则,全球减排的长期目标和减排义务的分担,通过资金、技术、市场、适应等国际政策措施吸引发展中国家参与,减少毁林排放,以及政策执行和制度建设等问题进行了评述和解读,其中内涵对深入开展国际气候制度的研究和我国参与国际气候谈判有重要启发。     

Shaping climate policy in the housing sector in northern Chinese cities

What are relevant urban development investment strategies for improving building energy efficiency (BEE) and decarbonizing the urban district heating supply in rapidly urbanizing China? Different trajectories of BEE and energy supply technologies are compared in the urban context in a northern Chinese city. Vigorous improvement of BEE will significantly enhance the prospective financial capacity to facilitate deployment of backstop technologies (e.g. carbon capture and storage) in order to decarbonize the energy supply and achieve the long-term targets of low-carbon buildings. Carbon finance instruments should be used to facilitate public policy to accompany the necessary transition in the urban development process. The government-run efficiency procurement scheme will overcome the problem of insufficient incentive and high transaction costs associated with individual Clean Development Mechanism projects. Appropriate investment strategies (allocation of financial resources over the time frame) will allow local governments to harness the large potentials of carbon emissions mitigation while minimizing the risk of long-term technical lock-in in the built environment in Chinese cities.     

Mapping the narrative positions of new political groups under the UNFCCC

Since the mid-1990s, the aim of keeping climate change within 2?°C has become firmly entrenched in policy discourses. In the past few years, the likelihood of achieving it has been increasingly called into question. The debate around what to do with a target that seems less and less achievable is, however, only just beginning. As the UN commences a two-year review of the 2?°C target, this article moves beyond the somewhat binary debates about whether or not it should or will be met, in order to analyse more fully some of the alternative options that have been identified but not fully explored in the existing literature. For the first time, uncertainties, risks, and opportunities associated with four such options are identified and synthesized from the literature. The analysis finds that the significant risks and uncertainties associated with some options may encourage decision makers to recommit to the 2?°C target as the least unattractive course of action.