Economic and political drivers of environmental impact shifting between countries

There is mounting evidence that major improvements in environmental quality in high-income countries over the past decades may have been achieved to a large degree through relocation of environmental impacts of consumption to other, usually poorer countries. While political and academic debates on appropriate policy interventions to address this challenge are gaining ground, we still know rather little about the drivers of international environmental impact shifting, other than international trade flows per se. We address this issue by focusing on the effects of economic inequality and political factors. We argue that income inequality between and within countries as well as variation in political institutions, environmental clauses in preferential trade agreements (PTAs), and participation in international environmental treaties could be important drivers or mitigators of environmental impact shifting between countries. We use novel panel data on five types of environmental impact flows between country dyads (187 countries, 1990–2015) to assess these arguments. We find that richer countries and countries with higher domestic economic equality tend to be the “outsourcers”, and poorer, domestically more unequal countries the “insourcers” of environmental impacts. Discrepancies in democracy levels aggravate the outsourcing from more equal to more unequal societies. In turn, environmental clauses in PTAs have a mitigating effect on environmental impact shifting, but participation in international environmental agreements has no such effect. Our findings highlight the need for green economy policies that reduce environmental footprints of consumption not only within high-income democracies, but also make their global supply chains more sustainable.     

Anticipating industry localization effects of clean technology deployment policies in developing countries

National ‘green growth’ strategies, which aim at decoupling economic development from adverse environmental impacts, have become a new paradigm for policymakers in developing countries. Many green growth strategies are based on policy instruments designed to incentivize the domestic deployment of relatively mature clean technologies and aim at fostering the formation of a local industry to develop and produce these technologies. While the empirical evidence on the localization effect of such policies in developing countries is mixed, there is a dearth of research systemically analyzing how differences between technologies affect patterns of localization, which could explain the observed variance. We address this gap and develop a typology which distinguishes four types of technologies requiring different types of capabilities. We do so by combining insights from the literature on technology transfer and catching-up of industries with insights from the literature on patterns of innovation across the technology life- cycle. We apply this typology to the case of low-emission development strategies and four exemplary low-carbon technologies, namely small and micro hydro power, wind turbines, electric cars, and solar cells, in order to analyze capability requirements, innovation patterns, and the effect of past deployment policies on industry localization. We synthesize these case studies and derive a heuristic to anticipate the localization effects of deployment policies for different types of technologies in countries with varying income levels. We argue that the heuristic can serve as starting point for policymakers aiming at clean technology industry localization. The paper concludes with a discussion of possible technology-specific green growth strategies for developing countries with different income levels and for international institutions supporting green growth.     

Innovation benefits from nuclear phase-out: can they compensate the costs?

This paper investigates whether an inefficient allocation of abatement due to constraints on the use of currently available low carbon mitigation options can promote innovation in new technologies and have a positive impact on welfare. We focus on the case of a nuclear power phase-out and endogenous technical change in energy efficiency and alternative low carbon technologies. The research is inspired by the re-thinking about nuclear power deployment which took place in some countries, especially in Western Europe, after the Fukushima accident in March 2011. The analysis uses an Integrated Assessment Model, WITCH, which features multiple externalities related to greenhouse gas emissions and innovation market failures. Our results show that phasing out nuclear power stimulates R&D investments and deployment of technologies with large learning potential. The resulting technology benefits that would not otherwise occur due to intertemporal and international externalities almost completely offset the economic costs of foregoing nuclear power. The extent of technology benefits depends on the stringency of the climate policy and is distributed unevenly across countries.     

International low carbon technology transfer: Do intellectual property regimes matter?

Transfer of low carbon technologies to developing countries has been recognized as important in global efforts to limit climate change. Yet the mechanics of international technology transfer, especially around intellectual property rights, have remained a controversial issue in international negotiations. Using a new dataset on international partnerships in China and India in three key low carbon technologies—solar photovoltaics, electric vehicles, and coal gasification/integrated gasification combined cycle—and complementary expert interviews we study the dynamics of the transfer of intellectual property and the underlying drivers that guide the development of business strategies and partnerships in the context of transitioning intellectual property regimes in emerging markets. We find that weak intellectual property regimes are indeed a hindrance to the diffusion of certain classes of low carbon technologies: (i) for cutting-edge technologies, (ii) for fully-embodied (explicitly codified) technologies, and (iii) for small firms. However, we also find that intellectual property issues do not represent a barrier to the diffusion of the relatively mature and low to medium cost low carbon technologies that are materially (at scale) most important for carbon dioxide emissions reduction in the short to medium term. Competitive technology supply, shifting market dynamics, and increasingly vigorous domestic innovation coupled with mechanisms and opportunities to structure credible intellectual property deals allow for the diffusion of key low carbon technologies to occur within the context of existing business, political, and institutional structures.     

Mediterranean migration futures: Patterns,drivers and scenarios

This study explores possible futures of Mediterranean migration based on an evaluation of past, current and future drivers of migration in the region. Since 1950, structural shifts in the political economy of the region have fundamentally changed the Mediterranean migration map. Particularly the rise of Gulf economies and south European growth and EU expansion has transformed the northern Mediterranean and the Gulf into new immigration poles. The main drivers of these changes are economic and political. Contrary to conventional beliefs, the role of environmental and also demographic factors seems comparatively limited, probabilistic and indirect. Future climate change and environmental stress may affect internal movement but are unlikely to result in massive international migration. Under most scenarios, Turkey and other North African countries may well evolve into immigration countries coinciding with increasing immigration from sub-Saharan Africa to the entire Mediterranean.     

Shocks to fish production: Identification,trends, and consequences

Sudden disruptions, or shocks, to food production can adversely impact access to and trade of food commodities. Seafood is the most traded food commodity and is globally important to human nutrition. The seafood production and trade system is exposed to a variety of disruptions including fishery collapses, natural disasters, oil spills, policy changes, and aquaculture disease outbreaks, aquafeed resource access and price spikes. The patterns and trends of these shocks to fisheries and aquaculture are poorly characterized and this limits the ability to generalize or predict responses to political, economic, and environmental changes. We applied a statistical shock detection approach to historic fisheries and aquaculture data to identify shocks over the period 1976–2011. A complementary case study approach was used to identify possible key social and political dynamics related to these shocks. The lack of a trend in the frequency or magnitude of the identified shocks and the range of identified causes suggest shocks are a common feature of these systems which occur due to a variety, and often multiple and simultaneous, causes. Shocks occurred most frequently in the Caribbean and Central America, the Middle East and North Africa, and South America, while the largest magnitude shocks occurred in Asia, Europe, and Africa. Shocks also occurred more frequently in aquaculture systems than in capture systems, particularly in recent years. In response to shocks, countries tend to increase imports and experience decreases in supply. The specific combination of changes in trade and supply are context specific, which is highlighted through four case studies. Historical examples of shocks considered in this study can inform policy for responding to shocks and identify potential risks and opportunities to build resilience in the global food system.     

Comparing public attitudes towards energy technologies in Australia and the UK: The role of political ideology

We explore the relationship between political ideology and public attitudes towards a range of energy technologies (namely: biomass, coal, shale (or coal seam) gas, natural gas, carbon capture and storage, hydroelectricity, nuclear, solar thermal and photovoltaic, wave and wind energy). Our empirical analysis draws on the results of two similar nationally representative public surveys that were conducted in Australia and the UK in 2017. Our findings suggest that political ideology is significantly associated with public attitudes towards energy technologies. Specifically, supporters of left-leaning political parties tend to be more supportive of renewables and opposed to biomass, shale (coal seam) gas, nuclear and fossil fuel energies compared to right-leaning individuals. We also create an alternative ideological proxy to capture the relative emphasis that parties place on the environment and economy and find that supporters of environmentally focused parties generally express similar energy preferences to left-leaning individuals and economy-focused respondents align with right-leaning attitudes. Our findings are robust to different choices of proxy.     

Public policy and financial resource mobilization for wind energy in developing countries: A comparison of approaches and outcomes in China and India

We analyze and contrast how China and India mobilized financial resources to build domestic technological innovation systems in wind energy. To that end, we identify distinct stages of technology diffusion in the two countries in the period 1986–2012, and analyze the interplay between public policies and the development of the technological innovation system across the different stages. We show that the two countries’ distinct development strategies for wind energy – China developed wind energy largely through its state-owned enterprises, while India opened up wind energy investment to the private sector in the early 1990s – influenced system outcomes in terms of technology diffusion, domestic industry structure, competitiveness, and ownership. By unraveling the interplay between public policies, investment risks and returns, and actor characteristics, we explain the differences in system outcomes and identify important policy trade-offs between the two strategies. Our analysis provides novel insights about the process of financial resource mobilization in technological innovation systems, the dynamics of innovation-system growth, and the policy trade-offs that must be reconciled by countries that aim to promote the diffusion of a particular technology.     

Transforming agricultural land use through marginal gains in the food system

There is an increasing need for transformational changes in the global food system to deliver healthy nutritional outcomes for a growing population while simultaneously ensuring environmental sustainability. However, such changes are subject to political and public constraints that usually allow only gradual, incremental changes to occur. Drawing inspiration from the British cycling team’s concept of marginal gains, we show how transformation might be reconciled with incremental changes. We demonstrate that a set of marginal food system changes acting to increase production efficiency, to reduce losses or to adjust diets could collectively reduce the agricultural land required globally for food production by 21%, or over a third given higher adoption rates. The results show that while all categories of action are important, changes in consumer choices in Europe, North America and Oceania and in the supply-chain in Africa and West and Central Asia have the greatest potential to reduce the land footprint of the food system.     

The economics of bioenergy with carbon capture and storage (BECCS) deployment in a 1.5 °C or 2 °C world

Bioenergy with carbon capture and storage (BECCS) and afforestation are key negative emission technologies suggested in many studies under 2 °C or 1.5 °C scenarios. However, these large-scale land-based approaches have raised concerns about their economic impacts, particularly their impact on food prices, as well as their environmental impacts. Here we focus on quantifying the potential scale of BECCS and its impact on the economy, taking into account technology and economic considerations, but excluding sustainability and political aspects. To do so, we represent all major components of BECCS technology in the MIT Economic Projection and Policy Analysis model. We find that BECCS could make a substantial contribution to emissions reductions in the second half of the century under 1.5 and 2 °C climate stabilization goals, with its deployment driven by revenues from carbon dioxide permits. Results show that global economic costs and the carbon prices needed to hit the stabilization targets are substantially lower with the technology available, and BECCS acts as a true backstop technology at carbon prices around $240 per tonne of carbon dioxide. If driven by economics alone, BECCS deployment increases the use of productive land for bioenergy production, causing substantial land use changes. However, the projected impact on commodity prices is quite limited at the global scale, with global commodity price indices increasing by less than 5% on average. The effect is larger at the regional scale (up to 15% in selected regions), though significantly lower than previous estimates. While BECCS deployment is likely to be constrained for environmental and/or political reasons, this study shows that the large-scale deployment of BECCS is not detrimental to agricultural commodity prices and could reduce the costs of meeting stabilization targets. Still, it is crucial that policies consider carbon dioxide removal as a complement to drastic carbon dioxide emissions reductions, while establishing a credible accounting system and sustainable limits on BECCS.     

The role of international business in clean technology transfer and development

While research has generated very useful insights, usually at the macro level, regarding the multifaceted nature of environmental innovation and regulation, the characteristics and drivers peculiar to international companies have remained underexposed in the policy-related literature on clean technology transfer and development. This article aims to help open the ‘black box’ of business, also as input for future policy making, by discussing aspects that influence corporate responses: sector-specific and company-specific peculiarities as well as those related to country contexts (both origin countries and host countries for companies). Most of the climate-related investments in ‘developing’ countries turn out to have been geared to a few emerging economies, generally involving established technologies with limited transfer, and a major role for developed-country utilities, particularly from Europe. Despite these limitations, there is a base with experience being built up, and a potential for extension to lesser-developed areas, but that requires market co-creation by joint business and governmental efforts. As viable business models are largely lacking, the article suggests three main modalities, ranging from fully commercial to primarily publicly funded, involving different types of actors and countries. Gearing policies more towards corporate realities and reaping the international momentum of sustainable energy might also further climate goals.     

Russia at GHG Market

In the first Kyoto commitment period Russia could be the major supplier for the greenhouse gases (GHG) emissions market. Potential Russian supply depends on the ability of Russia to keep GHG emissions lower than the Kyoto target. In the literature there is no common understanding of the total trading potential of Russia at the international carbon market. In this paper we focus on CO₂ emission, which constituted nearly 80%of Russian GHG emission. We compare different projections of Russian CO₂emission and analyze the most important factors, which predetermine the CO₂emission growth. In a transition economy these factors are: Gross Domestic Product(GDP) dynamic, changes of GDP structure, innovation activity, transformation of export-import flows and response to the market signals. The input-output macroeconomic model with the two different input-output tables representing old and new production technologies has been applied for the analysis to simulate technological innovations and structural changes in the Russian economy during transition period. The Russian supply at the international GHG market without forest sector may be up to 3 billion metric ton of CO₂ equivalent. Earlier actions to reduce CO₂ emission are critical to insure theRussiansupply at the international carbon market. With regard to the current status of the Russian capital market, the forward trading with OECD countries is only the possibility to raise initial investments to roll no-regret and low-cost GHG reduction. This paper discusses uncertainties of RussianCO₂emission dynamics and analyzes the different incentives to lower the emission pathway.     

The socio-political context for deploying carbon capture and storage in China and the U.S

Together, the U.S. and China emit roughly 40% of world's greenhouse gas emissions, and these nations have stated their desire to reduce absolute emissions (U.S.) or reduce the carbon intensity of the economy (China). However, both countries are dependent on coal for a large portion of their energy needs, which is projected to continue over the next several decades. They also have large amounts of coal resources, coal-dependent electricity production, and in China's case, extensive use of coal in the industrial sector, making any shift from coal socio-politically difficult. Both nations could use carbon capture and storage (CCS) technologies to simultaneously decrease greenhouse gas emissions and continue the use of domestic coal resources; however, the socio-political context for CCS deployment differs substantially between the two countries and potentially makes large-scale CCS deployment challenging. Here, we examine and compare the political and institutional contexts shaping CCS policy and CCS deployment, both for initial pilot projects and for the creation of large-scale CCS technology deployment, and analyze how the socio-political context for CCS in China and the United States aligns with national climate, energy security, and economic priorities.     

Innovation for sustainable energy from a pro-poor perspective

The development and transfer of clean energy technologies to achieve universal energy access is challenging due to the inherent complexities of the energy sector, and the energy governance and financial systems in developing economies. Innovation is an essential part of successfully addressing these difficulties. Duplicating the energy infrastructure models of developed countries will not be sufficient to meet the needs of poor consumers. To the extent that innovation can accelerate energy access, it is important to understand the specific types of innovations that are necessary and how they might be facilitated. The general features of existing international clean energy innovation systems, which are predominantly driven by the markets and emissions reduction mechanisms of developed and rapidly growing emerging economies, are reviewed and the alignment of these systems to the innovation processes required to extend energy access globally is evaluated. Drawing on the innovation policy literature, the attributes of effective international and domestic energy innovation systems that are pro-poor and the associated policy approaches are identified.     

Green growth rhetoric versus reality: Insights from Indonesia

By 2030 Indonesia aims to reduce its CO₂ emissions by 29% while maintaining a 7% annual GDP growth rate, thus making “green economy” a reality. Based on a review of literature and secondary data and interviews with key informants, this article examines the gap between these national ambitions and the reality on the ground, with particular attention to the challenges of multi-scalar environmental governance. It first introduces the green economy concept and discusses the main green growth policies and initiatives at the national level. The article then examines green growth ambitions at the provincial level in East Kalimantan province. Our findings suggest that existing plans to further expand oil palm plantations are at odds with provincial efforts to reduce emissions. This highlights a key paradox we identify at the heart of the green economy concept as it is developing in Indonesia: between a development trajectory based on resource extraction and agro-industrial development, and ‘green’ aspirations linked to environmental protection and greenhouse gas emissions reductions. We conclude that the main challenges to address these contradictions are related to the lack of coordination between different governance scales and a political economy that is not conducive to reforms in the land-based sector. There is a need to align investment, planning, and green growth policies, based on a strong political commitment and an awareness of social and environmental trade-offs. On a more general level the article shows that the green economy concept refers to a form of environmental governance in which authorities and interests may overlap and come into conflict at different scales. Hence, differing priorities may lead the material expression of the green economy to diverge significantly from policy as it is initially laid out.     

Addressing policy credibility problems for low-carbon investment

A combination of characteristics of the climate change problem make the credibility of future commitments crucial for climate policy: the long lifetimes of carbon dioxide in the atmosphere and of energy infrastructure requires a long term perspective; the inherently global aspects of the atmosphere as a public good requires international coordination; decarbonizing the global economy depends on the incentives for investment in innovation; and persistent uncertainty— both about the problem and potential solutions—necessitate adapting to new information. Even in a first best world, climate policy design needs to navigate a tradeoff between making commitments that are sufficiently credible to stimulate transformation and retaining flexibility to adjust. The goal of this paper is to use the experience in other policy areas to assemble a broad set of possible remedies for addressing credibility problems and then characterize the advantages and disadvantages of each. We first review the theory and practice of addressing credibility problems in monetary, fiscal, and trade policy. From this we derive a taxonomy of four policy design categories. As a preliminary example, we then apply this framework to assess the credibility of climate targets made by selected developing countries as part of the United Nations Framework Convention on Climate Change process. Finally, we evaluate the items in the taxonomy as policy alternatives in terms of their effects on incentives for investment in low-carbon technology.     

Natural gas and climate finance

Should energy projects to extend the use of natural gas be considered for funding under public climate finance commitments? This article provides an overview of evidence for and against climate finance for natural gas projects. The argument focuses on a case study, the UK’s International Climate Fund (ICF). This synthesis concludes that gas-related projects will rarely be eligible for funding under public climate finance, save a few exceptions in which they provide energy access to households directly. Although gas power plants have generally lower emissions than those which use other fossil fuels such as coal, their impact will depend on the material constraints to calculate emissions reductions, the context of implementation, and the political economy of the target country. Three case studies demonstrate that energy access projects need to be understood as providing a whole range of sustainable benefits, from improving local health to reducing emissions. Overall, gas-related projects are complex interventions that require context-specific knowledge of both the effects of technology and the possible business models that can work in context.

POLICY RELEVANCE

This article investigates whether projects related to natural gas constitute an appropriate use of public climate finance, with a particular focus on the UK’s International Climate Fund. Policy makers in developed countries will decide in the coming years how to use public climate finance; that is, the fraction of overseas development assistance (ODA) for climate change mitigation and adaptation. In the UK, for example, the ICF is the most important instrument to provide climate finance for developing countries. In 2013, the UK set out a clear position ‘to end support for public financing of new coal-fired power plants overseas, except in rare circumstances.’ This ban has fostered debate about whether similar positions should follow for other fossil fuels such as natural gas, specifically in the context of ICF funding. Similar debates are taking place in other countries such as Germany and Norway, and are informing the implementation of international facilities such as the Green Climate Fund.     

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.     

Buying environmental insurance: Prospects for trading of global climate-protection services

In order to alleviate the threat of global climate change, coordinated international action is needed. This cooperation should include multilateral agreements and new economic initiatives to help implement measures that will slow the accumulation of carbon dioxide in the Earth's atmosphere due to tropical deforestation and fossil-fuel use. An international market in environmental services can help to safeguard the Earth's climate and foster economic development through a North-South transfer of financial resources.We suggest international carbon-emission offsets (ICEOs) as a means by which international markets, under a policy umbrella such as a multilateral climate-protection treaty, could trade carbon-saving services. Such a market would provide a currency for rewarding actions that reduce global carbon emissions, allowing carbon emitters to seek the least expensive ways to reduce emissions. This currency would transfer cash and/or debt relief from industrialized nations to developing nations, allowing the developing nations to profit from the use of clean energy technologies and the protection, rather than depletion, of tropical forests.     

National policy and SMEs in technology transfer: the case of Israel

Increasing the rate of climate technology transfer is a critical concern. The international community facilitates the development and deployment of climate technologies for the needs of the South in two primary ways: first, through the use of multilateral frameworks for technology transfer and, second, through in-country capacity building for research, development, and deployment in developing countries. However, scant attention is given to whether national-level frameworks in industrialized countries can support technology transfer. This issue may be of particular relevance to small and medium enterprises (SMEs) in developed countries, due to their relative lack of experience in international markets. The barriers that prevent SMEs from developing and exporting more technologies to the South are identified, by using Israel as a case study. Although Israel is an important global source of climate technology innovation, it currently does not engage much with the developing world. Four principle barriers to greater involvement of OECD SMEs in technology transfer for climate mitigation in developing countries are: (1) lack of knowledge of market needs in developing economies, (2) lack of financial mechanisms to support R&D, (3) lack of opportunities for partnership building, and (4) lack of support for demonstration sites in developing countries.