Public values for energy system change

In this paper we discuss the importance of framing the question of public acceptance of sustainable energy transitions in terms of values and a ‘whole-system’ lens. This assertion is based on findings arising from a major research project examining public values, attitudes and acceptability with regards to whole energy system change using a mixed-method (six deliberative workshops, n = 68, and a nationally representative survey, n = 2441), interdisciplinary approach. Through the research we identify a set of social values associated with desirable energy futures in the UK, where the values represent identifiable cultural resources people draw on to guide their preference formation about particular aspects of energy system change. As such, we characterise public perspectives as being underpinned by six value clusters relating to efficiency and wastefulness, environment and nature, security and stability, social justice and fairness, autonomy and power, and processes and change. We argue that this ‘value system’ provides a basis for understanding core reasons for public acceptance or rejection of different energy system aspects and processes. We conclude that a focus on values that underpin more specific preferences for energy system change brings insights that could provide a basis for improved dialogue, more robust decision-making, and for anticipating likely points of conflict in energy transitions.     

Interactions between climate and energy policies: the case of Spain

Emissions trading schemes (ETS) coexist with other environmental and energy policies, such as renewable energy promotion schemes. The potential synergies and conflicts between these policies are worth analysing. Spain is used as a case study to illustrate the theoretical, practical and quantitative interactions. The existence of national policies which affect CO₂ emissions and interact with the EU ETS may lead to conflicts, which could make it more difficult to reach the objectives of emissions reductions, local sustainability benefits, dynamic efficiency and moderate consumer costs. The coordination of efforts to mitigate these conflicts is difficult and may have limited effectiveness, since the instruments employed have multiple objectives and different territorial scopes. However, the coexistence of the EU ETS with other instruments can be justified if the latter can provide social benefits or tackle problems that the former cannot provide or solve (such as ‘local’ and ‘dynamic efficiency’ benefits). The results of an interaction between an ETS and renewable electricity promotion schemes depend on the type of RES-E (electricity from renewable energy sources) support scheme being used and on the specific design features of the instrument implemented.     

Investing in low-carbon transitions: energy finance as an adaptive market

The amount of capital required to transition energy systems to low-carbon futures is very large, yet analysis of energy systems change has been curiously quiet on the role of capital markets in financing energy transitions. This is surprising given the huge role finance and investment must play in facilitating transformative change. We argue this has been due to a lack of suitable theory to supplant neoclassical notions of capital markets and innovation finance. This research draws on the notion from Planetary economics: Energy, climate change and the three domains of sustainable development, by Grubb and colleagues, that planetary economics is defined by three ‘domains’, which describe behavioural, neoclassical, and evolutionary aspects of energy and climate policy analysis. We identify first- and second-domain theories of finance that are well established, but argue that third-domain approaches, relating to evolutionary systems change, have lacked a compatible theory of capital markets. Based on an analysis of electricity market reform and renewable energy finance in the UK, the ‘adaptive market hypothesis' is presented as a suitable framework with which to analyse energy systems finance. Armed with an understanding of financial markets as adaptive, scholars and policy makers can ask new questions about the role of capital markets in energy systems transitions.

Policy relevance

This article explores the role of financial markets in capitalising low-carbon energy systems and long-term change. The authors demonstrate that much energy and climate policy assumes financial markets are efficient, meaning they will reliably capitalise low-carbon transitions if a rational return is created by subsidy regimes or other market mechanisms. The authors show that the market for renewable energy finance does not conform to the efficient markets hypothesis, and is more in line with an ‘adaptive’ markets understanding. Climate and energy policy makers that design policy, strategy, and regulation on the assumption of efficient financial markets will not pay attention to structural and behavioural constraints on investment; they risk falling short of the investment levels needed for long-term systems change. In short, by thinking of financial markets as adaptive, the range of policy responses to enable low-carbon investment can be much broader.     

Sustainable energy transition in developing countries: the role of energy aid donors

Dialogues on global climate policy are increasingly discussing the sustainable energy transition, with Goal 7 of the UN’s Sustainable Development Goals highlighting the importance of affordable and clean energy. This study looks at foreign aid as a carrier of global climate policy and examines donor behaviour in the energy sector. By examining donor behaviour when giving energy aid, one can grasp how the donor community helps recipients achieve a sustainable energy transition. A panel of donor–recipient pairs, covering 29 donors and 99 recipients, was constructed for the period between 1996 and 2013, using data from Organisation for Economic Co-operation and Development Creditor Reporting System (OECD CRS), International Energy Agency (IEA) and World Development Indicators (WDI). The pair-year panel data were empirically analysed using a two-part model to test whether energy aid donors respond to recipients’ needs with regard to renewable energy and residential electricity. The findings demonstrate that donors respond to recipients’ sustainable energy needs, both renewable and residential, when selecting recipients. Moreover, donors tend to increase the amount of aid based on renewable energy needs. The findings also highlight the significant role of international climate policy, as donors have changed their energy aid-giving patterns since the start of the Kyoto Protocol. Contrary to the common belief in the aid-giving literature, this study shows that, with regard to energy aid, donor interests are more weakly related to recipient selection than are recipient needs.

Key policy insights

• Donors are influenced by the residential energy needs of recipients when giving energy aid, which aligns with the Sustainable Development Goals.

• Donors’ energy aid-giving patterns changed between the periods before and after entry into force of the Kyoto Protocol, highlighting the significant role of international climate change policy.

• Policy makers and aid practitioners can steer donors to continue to allocate resources to the development of recipients’ energy policy and to help recipients prepare institutional structures to attract private investment in sustainable energy.

     

Materialising energy and water resources in everyday practices: Insights for securing supply systems

Policies to secure energy and water supplies from the impacts of climate change are currently being developed or are in place in many developed nations. Little is known about how these policies of security, and the systems of resource provision they prioritise, affect householders’ capacity to adapt to climate change. To better understand the connections between resource provision and consumption, this paper explores the notion that different ‘energies’ and ‘waters’ can be conceptualised as material elements of social practices, which shape the way practices are performed. We draw on a study of Australian migrants and their experiences with different resource provision systems in multiple countries, time periods and contexts across three generations. We discuss the differing characteristics of energy and water provision across three broad resource ‘eras’, and the way resources enable or reduce resourcefulness, adaptive capacity and resilience. We find that policy makers may inadvertently reduce householders’ capacity to respond and adapt to climate change impacts by prioritising the resource characteristics of immateriality, abundance and homogeneity. We conclude that policy which prioritises the resource characteristics of materiality, diversity and scarcity is an important, underutilised and currently unacknowledged source of adaptive capacity.     

Tools for a new climate conversation: A mixed-methods study of language for public engagement across the political spectrum

Political orientation and ideology are amongst the most significant influences on climate change attitudes and responses. Specifically, those with right-of-centre political views are typically less concerned and more sceptical about climate change. A significant challenge remains to move beyond this ideological impasse and achieve a more open and constructive debate across the political spectrum. This paper reports on novel mixed-methods research in the UK to develop and test a series of ‘narratives’ to better engage citizens with centre-right political views. Qualitative work in Study 1 revealed two particularly promising narratives. The first focused on the idea that saving energy is predicated on the ‘conservative’ principle of avoiding waste; the second focused on the advantages of ‘Great British Energy’ (based on patriotic support for domestic low-carbon technologies). An online experiment in Study 2 with a representative UK sample compared these narratives with a more typically left-of-centre narrative focused on the concept of ‘climate justice’ with a representative sample of the UK public. Results indicate that the first two narratives elicited broad agreement and reduced scepticism amongst centre-right participants, while the ‘climate justice’ narrative (which reflects a common environmental message framing) polarised audiences along political lines. This research offers clear implications for how climate change communicators can move beyond preaching to the converted and initiate constructive dialogue about climate change with traditionally disengaged audiences.     

An assessment of climate change impacts and adaptation for the Torres Strait Islands, Australia

Adaptive practices are taking place in a range of sectors and regions in Australia in response to existing climate impacts, and in anticipation of future unavoidable impacts. For a rich economy such as Australia’s, the majority of human systems have considerable adaptive capacity. However, the impacts on human systems at the intra-nation level are not homogenous due to their differing levels of exposure, sensitivity and capacity to adapt to climate change. Despite past resilience to changing climates, many Indigenous communities located in remote areas are currently identified as highly vulnerable to climate impacts due to their high level of exposure and sensitivity, but low capacity to adapt. In particular, communities located on low-lying islands have particular vulnerability to sea level rise and increasingly intense storm surges caused by more extreme weather. Several Torres Strait Island community leaders have been increasingly concerned about these issues, and the ongoing risks to these communities’ health and well-being posed by direct and indirect climate impacts. A government agency is beginning to develop short-term and long-term adaptation plans for the region. This work, however, is being developed without adequate scientific assessment of likely ‘climate changed futures.’ This is because the role that anthropogenic climate change has played, or will play, on extreme weather events for this region is not currently clear. This paper draws together regional climate data to enable a more accurate assessment of the islands’ exposure to climate impacts. Understanding the level of exposure and uncertainty around specific impacts is vital to gauge the nature of these islands’ vulnerability, in so doing, to inform decisions about how best to develop anticipatory adaptation strategies over various time horizons, and to address islanders’ concerns about the likely resilience and viability of their communities in the longer term.     

Public perceptions of geoengineering research governance: An experimental deliberative approach

Recent attempts to conduct experiments in climate ‘geoengineering’ have demonstrated the deeply controversial nature of this field of scientific research. Social scientists have begun to explore public perceptions of geoengineering, and have documented a significant degree of concern over the effective governance of research and experimentation in this area. Yet, public perception on what constitutes a legitimate geoengineering experiment and how it should be governed remains under-researched. In this article we report on a series of experimental deliberative workshops with members of the public designed to elicit and explicate diverse understandings of geoengineering experiments and their governance. In contrast to previous methods of invited public deliberation, which privilege egalitarian-consensual models of discourse and decision-making, we test a novel approach that places majoritarian, individualistic, and consensual forms of public deliberation on an equal footing. Our study suggests that the perceived controllability of experimental interventions is central to public views on their acceptability, but that controllability is itself a complex, multifaceted quality, drawing together a set of heterogeneous concerns about the purpose and repercussions of scientific work. The citizens who participated in our workshops employed four criteria to adjudicate the acceptability of geoengineering experiments: (1) the degree of containment; (2) the uncertainty surrounding experimental outcomes; (3) the reversibility of impacts; and (4) the scientific purity of the enterprise. We theorize that the public legitimacy of geoengineering experiments depends on variable, context-specific combinations of these criteria, and that technical determinations of the proper ‘scale’ or ‘location’ for geoengineering research will be poor predictors of the sorts of public concerns that will be triggered by further experimentation in this area.     

Sustainable energy development and climate change in China

Abstract

This article analyses the national circumstances and major factors underpinning China's energy demand and supply, energy-related emissions, and consequently China's sustainable development. These factors include the huge, still growing, and aging population, rapid economic growth, ongoing industrialization and urbanization, environmental and health concerns at local, regional and global level. Against such background analysis, the article explores the potential and constraints of non-fossil fuel, fuel-switching to natural gas, economy restructuring and clean coal technology in mitigating emissions of greenhouse gases (GHG) and ensuring energy supply in China. The authors reiterate the importance of improving energy efficiency in China and discuss how to integrate renewable energy into rural development. The article concludes with an in-depth discussion about redefining development goals, the equity issue in climate change process, and the linkage with sustainable development.     

Brazil beyond 2020: from deforestation to the energy challenge

The main assumptions and findings are presented on a comparative analysis of three GHG long-term emissions scenarios for Brazil. Since 1990, land-use change has been the most important source of GHG emissions in the country. The voluntary goals to limit Brazilian GHG emissions pledged a reduction in between 36.1% and 38.9% of GHG emissions projected to 2020, to be 6–10% lower than in 2005. Brazil is in a good position to meet the voluntary mitigation goals pledged to the United Nations Framework Convention on Climate Change (UNFCCC) up to 2020: recent efforts to reduce deforestation have been successful and avoided deforestation will form the bulk of the emissions reduction commitment. In 2020, if governmental mitigation goals are met, then GHG emissions from the energy system would become the largest in the country. After 2020, if no additional mitigation actions are implemented, GHG emissions will increase again in the period 2020–2030, due to population and economic growth driving energy demand, supply and GHG emissions. However, Brazil is in a strong position to take a lead in low-carbon economic and social development due to its huge endowment of renewable energy resources allowing for additional mitigation actions to be adopted after 2020.

Policy relevance

The period beyond 2020 is now relevant in climate policy due to the Durban Platform agreeing a ‘protocol, legal instrument or agreed outcome with legal force’ that will have effect from 2020. After 2020, Brazil will be in a situation more similar to other industrialized countries, faced with a new challenge of economic development with low GHG energy-related emissions, requiring the adoption of mitigation policies and measures targeted at the energy system. Unlike the mitigation actions in the land-use change sector, where most of the funding will come from the national budgets due to sovereignty concerns, the huge financial resources needed to develop low-carbon transport and energy infrastructure could benefit from soft loans channelled to the country through nationally appropriate mitigation actions (NAMAs).     

Post-Kyoto energy strategy of the Russian Federation,outlooks and prerequisites of the Kyoto mechanisms implementation in the country

Abstract

Energy sector emissions from Russia have declined by about 33% from 1990 levels. We estimate that some 60–70% of the reduction is due to economic decline, and about 8–12% of it is due to reforms in the energy sector; the remainder being due to the wider use of natural gas and structural changes in the economy. Vigorous institutional and technological measures to promote energy efficiency could lead to savings of over 100 million t.c.e. per year by 2010, and keep CO₂ emissions fairly close to current levels over the decade. In our view, international emissions trading should not lead to global emissions growth, but should facilitate the best energy saving and efficiency. Consequently, we propose that the available assigned amount should be divided into two components. That part arising from ‘type 1’ reductions, produced by special projects and measures relating to GHG reduction taken since 1990, should be freely traded; whereas the remaining ‘type 2’ surplus, without a clear link to real emission reduction activity, should only be traded if the revenues are recycled into special projects resulting in emissions reduction equal to or more than the amount of emissions sold.     

Farmers and perverse outcomes: The quest for food and energy security,emissions reduction and climate adaptation

Victorian farmers have experienced significant impact from climate change associated with drought and more recently flooding. These factors form a convergence with a complex of other factors to change production systems physically; and farmers’ decision making is variously described as adaptive or maladaptive to these drivers of change. Recently updated State Government policies on farming, climate and water have immediate and long term implications for food production systems but are not readily interpreted at a local scale. Further, peak oil and energy security are only partially integrated into either climate or water policy discourse. In effect, despite some far-sighted words about the meaning of climate change, uncertainty is largely met with a ‘business as usual’ mantra. Farmer narratives are used to demonstrate their systemic and increasing vulnerability and likelihood of perverse outcomes. The Future Farming strategy and Our Water Our Future are briefly analyzed, as are potential implications of the rhetoric of newly elected conservative government. Using ideas from Bourdieu and Bhabha we suggest that the reliance on farmers being able to innovate and take up opportunities associated with the uncertainty of large scale changes in climate and energy availability are misguided. It is more likely that current policy directions entrench the values of the global market and its elite, leaving farmers locked-in to historical structural responses that will not be successful in the long-term and will diminish their ability to imagine radical and diverse ways of avoiding the maladaptive structures currently surrounding their production systems.     

Causes and uncertainty of future summer drying over Europe

Previous studies have shown that the continuing rise in anthropogenic emissions is likely to cause continental European summers to become substantially drier over the coming century. Since this predicted decline in rainfall and soil moisture (SM) would bring significant stress to society and ecosystems, it is essential that its reliability or otherwise is properly assessed. One approach is to gain a better understanding of the model’s mechanisms of regional climate change and integrate this with a knowledge of the model’s strengths and weaknesses. Here we propose a methodology that partitions some of the mechanisms of regional climate change, and apply it to the problem of summer drying over continental Europe. Earlier work suggests that a plausible partition of the mechanisms of future mid-latitude continental summer drying might be as follows: (a) an earlier and more rapid decline in SM during spring, leading to lower SM in summer, and hence less convective rainfall (‘Spring SM’); (b) a larger land–sea contrast in lower tropospheric summer warming, leading to reduced relative humidity in air advected onto the continent, and so reduced rainfall (‘Warming’); (c) other large-scale atmospheric changes, including remotely forced circulation changes (‘Large-Scale’); and (d) a positive feedback mechanism in summer, whereby the reduced rainfall dries the soil further, so reducing convective activity further (‘Summer SM Feedback’). We attempt to isolate these mechanisms by integrating a geographic subset of the high resolution global atmospheric model HadAM3P to assess their relative importance in generating the projected European summer drying. Each mechanism is approximately represented (and so isolated) using an appropriate mix of inputs to the model, with some matching a control integration and others matching a future scenario integration. These mixed inputs are: atmospheric composition (CO₂, aerosol and ozone), surface boundary data (SM and SSTs), and lateral boundary data (temperature, moisture, winds, and surface pressure). We describe this methodology and the experimental suite in some detail, as well as the constraints on our ability to fully separate these mechanisms. It is also shown that the separation of mechanisms is not compromised by interactions between them. For continental and southeastern Europe, it is found that both the ‘Warming’ and ‘Spring SM’ mechanisms are the primary drivers of the projected summer drying. ‘Summer SM Feedback’ plays an important secondary role, and ‘Large-Scale’ mechanisms, as represented here, have least influence. Since the two dominant mechanisms depend on processes in which we have reasonable confidence, this gives us high confidence in the sign of the projected summer drying over continental and southeastern Europe. Nevertheless, uncertainties in model formulation and future anthropogenic emissions mean that the magnitude of this future rainfall anomaly remains unclear. Over Great Britain and southern Scandinavia, our experiments show that the rainfall anomaly is dominated by opposing effects from the ‘Warming’ and ‘Large-Scale’ mechanisms, which in this area dictate increased and decreased rainfall respectively. Given this rivalry, and also that we have low confidence in the ‘Large-Scale’ mechanism, this suggests that even the sign of the projected drying here is uncertain.     

Promiscuous corroboration and climate change translation: A case study from the Marshall Islands

Public knowledge of global warming depends on the translation of climate science from specialist communities to citizens, and from scientific language to the vernacular; yet, no two cultures or languages being perfectly commensurable, this process of translation necessarily entails a transformation of the climate change concept. I explore this transformation, and the unexpected consequences it spells for local acceptance and understanding of climate science, through a case study in the Marshall Islands, a low-lying nation endangered by sea level rise and other climate change impacts. Various framings of this threat have been communicated to Marshall Islanders via local media, NGO, and government outlets. ‘Climate’ is here translated as Marshallese mejatoto, the closest equivalent in this Austronesian language. Yet mejatoto refers not only to climate/weather but also to the environment or cosmos in general, including the social sphere, a result of the Marshallese conceptual conflation of ‘nature’ and ‘culture.’ As a result, locals point to processes as disparate, and un-‘climatic,’ as a solar eclipse, accelerating time, and weakening tradition as examples of, and evidence for, climate change. In a society already vigorously possessed of narratives of change, this ‘promiscuous corroboration’ makes the prediction of climate change extremely easy to trust. While this ‘mistranslation’ carries with it certain dangers, when viewed instead as a reinterpretation it is rife with opportunity. Climate change communicators both abroad and at home must therefore carefully consider the transformations introduced by various translations of ‘climate change,’ yet also appreciate ‘mistranslation’ for its ability to render concepts meaningful to local actors and to stimulate citizen–scientist dialogue.     

The cost of achieving South Africa’s ‘fair share’ of global climate change mitigation

Global climate change mitigation action is hampered by systematic under-assessment of national ‘fair shares’, largely on the basis of perceived national interests. This paper aims to inform discussions centred on South Africa’s nationally determined contribution (NDC) by estimating (1) emissions reduction pathways for the country using the Climate Equity Reference Calculator (CERC) assuming a maximum 2°C aggregate warming target and (2) the likely economy-wide net mitigation costs or savings associated with reaching these pathways if known lower-cost mitigation measures, identified through the national mitigation potential analysis, are prioritised. The cumulative net savings associated with achieving the CERC ‘fair share’ emissions pathway, assuming the moderate use of low carbon power generation measures, would reach $5.3 billion by 2030. Net savings could be substantially greater reaching $46.8 billion by 2030 assuming power generation focuses on moving towards full decarbonisation. An unconditional commitment to the mitigation action implied by the ‘fair share’ emissions pathway therefore seems reasonable and prudent purely from the point of view of net country-wide savings. Only if power generation moves towards full decarbonisation would there be a reasonable chance of achieving the more ambitious CERC domestic emissions pathway. However, the significant additional cost associated with achieving the domestic emissions pathway should be conditional on international assistance.

Key policy insights

• South Africa can only achieve its ‘fair share’ of the global mitigation effort if greater use is made of renewable energy options, and can realise significant net savings if it does so.

• Further emissions reductions would incur costs and require significant upscaling of the share of renewable energy and full implementation of all non-power generation mitigation measures available.

• Committing to this further mitigation action contingent on international finance would both strengthen the nation’s position in climate negotiations and support the provision of finance for those vulnerable developing nations that bear little or no responsibility for climate change.

     

Governing epidemics in an age of complexity: Narratives,politics and pathways to sustainability

This paper elaborates a ‘pathways approach’ to addressing the governance challenges posed by the dynamics of complex, coupled, multi-scale systems, while incorporating explicit concern for equity, social justice and the wellbeing of poor and marginalised groups. It illustrates the approach in relation to current policy challenges of dealing with epidemics and so-called ‘emerging infectious diseases’ such as avian influenza and haemorrhagic fevers, which involve highly dynamic, cross-scale, often-surprising viral–social–political–ecological interactions. Amidst complexity, we show how different actors in the epidemics field produce particular narratives which frame systems and their dynamics in different ways, promote particular goals and values, and justify particular pathways of disease response. These range from ‘outbreak narratives’ emphasising threat to global populations, to alternative but often marginalised narratives variously emphasising long-term structural, land use and environmental change, local knowledge and livelihood goals. We highlight tendencies – supported by cognitive, institutional and political pressures – for powerful actors and institutions to ‘close down’ around narratives that emphasise stability, underplaying longer term, less controllable dynamics. Arguing that governance approaches need to ‘open up’ to embrace strategies for resilience and robustness in relation to epidemics, we outline what some of the routes towards this might involve, and what the resulting governance models might look like. Key are practices and arrangements that involve flexibility, diversity, adaptation, learning and reflexivity, as well as highlighting and supporting alternative pathways within a progressive politics of sustainability.     

China’s future emission reduction challenge and implications for global climate policy

In December 2015, China joined 190 plus nations at Paris in committing to the goal of limiting the rise in global average temperature to ‘well below’ 2°C. Carbon budget analysis indicates that goal will require not only that the European Union and US reduce their emissions by greater than 80% by 2050, but that China at least comes close to doing so as well, if any budget is to be left over for the rest of the world (RoW). Given that RoW emissions are, and will come from, low-income and emerging nations, China’s emission reduction potential is of no small consequence. In this paper, we use the Kaya identity to back out changes in the drivers of CO₂ emissions, including gross domestic product (GDP), energy intensity (E/GDP) and the carbon content of energy (C/E), the latter two calculated to be consistent with China’s long-term GDP growth rate forecasts and specified 2050 CO₂ emission reduction targets. Our results suggest that even achieving China’s highly optimistic renewable energy targets will be very far from sufficient to reduce China’s CO₂ emissions from 9.1?Gt it emitted in 2015 to much below 3?Gt by 2050. Even reducing its emissions to 5?Gt will be challenging, yet this falls far short of what is needed if the world is to meet its ‘well below’ 2°C commitment.

Key policy insights

• Under the Paris Agreement there is great pressure on China to very substantially reduce its emissions by 2050.

• While China has attached great importance to renewables and nuclear energy development, even achieving the most optimistic targets would not be sufficient to reduce China’s emissions from 9.1?Gt in 2015 to much below 3?Gt by 2050.

• China’s emission reduction potential falls far short of what is needed if the world is to meet its Paris ‘well below’ 2°C commitment, even if the EU and US reduce their emissions to zero by 2050.

• Emission cuts consistent with the Paris Agreement will require that China and the world give much greater weight to advancing research and development of scalable low-, zero- and negative-carbon sources and technologies.

     

Reaching a climate agreement: compensating for energy market effects of climate policy

Because of large economic and environmental asymmetries among world regions and the incentive to free ride, an international climate regime with broad participation is hard to reach. Most of the proposed regimes are based on an allocation of emissions rights that is perceived as fair. Yet, there are also arguments to focus more on the actual welfare implications of different regimes and to focus on a ‘fair’ distribution of resulting costs. In this article, the computable general equilibrium model DART is used to analyse the driving forces of welfare implications in different scenarios in line with the 2?°C target. These include two regimes that are often presumed to be ‘fair’, namely a harmonized international carbon tax and a cap and trade system based on the convergence of per capita emissions rights, and also an ‘equal loss’ scenario where welfare losses relative to a business-as-usual scenario are equal for all major world regions. The main finding is that indirect energy market effects are a major driver of welfare effects and that the ‘equal loss’ scenario would thus require large transfer payments to energy exporters to compensate for welfare losses from lower world energy demand and prices.

Policy relevance

A successful future climate regime requires ‘fair’ burden sharing. Many proposed regimes start from ethical considerations to derive an allocation of emissions reduction requirements or emissions allowances within an international emissions trading scheme. Yet, countries also consider the expected economic costs of a regime that are also driven by other factors besides allowance allocation. Indeed, in simplified lab experiments, successful groups are characterized by sharing costs proportional to wealth. This article shows that the major drivers of welfare effects are reduced demand for fossil energy and reduced fossil fuel prices, which implies that (1) what is often presumed to be a fair allocation of emissions allowances within an international emissions trading scheme leads to a very uneven distribution of economic costs and (2) aiming for equal relative losses for all regions requires large compensation to fossil fuel exporters, as argued, for example, by the Organization of Petroleum Exporting Countries (OPEC).     

Dynamics of energy sector and GHG emissions in Saudi Arabia

The energy sector is the main contributor to GHG emissions in Saudi Arabia. The tremendous growth of GHG emissions poses serious challenges for the Kingdom in terms of their reduction targets, and also the mitigation of the associated climate changes. The rising trend of population and urbanization affects the energy demand, which results in a faster rate of increase in GHG emissions. The major energy sector sources that contribute to GHG emissions include the electricity generation, road transport, desalination plants, petroleum refining, petrochemical, cement, iron and steel, and fertilizer industries. In recent years, the energy sector has become the major source, accounting for more than 90% of national CO₂ emissions. Although a substantial amount of research has been conducted on renewable energy resources, a sustainable shift from petroleum resources is yet to be achieved. Public awareness, access to energy-efficient technology, and the development and implementation of a legislative framework, energy pricing policies, and renewable and alternative energy policies are not mature enough to ensure a significant reduction in GHG emissions from the energy sector. An innovative and integrated solution that best serves the Kingdom's long-term needs and exploits potential indigenous, renewable, and alternative energy resources while maintaining its sustainable development stride is essential.

Policy relevance

The main contributor to GHG emissions in Saudi Arabia is the energy sector that accounts for more than 90% of the national CO₂ emissions. Tremendous growth of GHG emissions poses serious challenges for the Kingdom in their reduction and mitigating the associated climate changes. This study examines the changing patterns of different activities associated with energy sector, the pertinent challenges, and the opportunities that promise reduction of GHG emissions while providing national energy and economic security. The importance of achieving timely, sustained, and increasing reductions in GHG emissions means that a combination of policies may be needed. This study points to the long-term importance of making near- and medium-term policy choices on a well-informed, strategic basis. This analytical paper is expected to provide useful information to the national policy makers and other decision makers. It may also contribute to the GHG emission inventories and the climate change negotiations.