TEMTI Newsletter
Theme on the Environment, Macoeconomics, Trade and Investment
MARCH 24, 2016
TEMTI NEWSLETTER
Contents
Message from the Commission Chair of CEESP
Message from TEMTI Chair
Activities and News from TEMTI Members
Commentary: CoP21: emerging framework and closing windows
Forthcoming events
EPGS Series
IUCN Commission
on Environmental,
Economic and
Social Policy
(CEESP)
Email to:
ceesp@iucn.org
Obituary
TEMTI regrets to announce the sad news of Professor Sam Moyo's death in New Delhi
last Saturday. A few days before this Newsletter was finalized, we learned the tragic
news of Professor Sam Moyo's death in a traffic accident in New Delhi. Sam was the
director of the African Institute of Agrarian Studies in Zimbabwe and had been
attending a conference at Jawaharlal Nehru University in New Delhi. Everyone who
knew him agrees that he was a giant thinker and a powerful advocate of social
justice. I met Sam when he came to lecture in Durban at the OSISA Winter School
for Economic Justice in 2013. I remember I took notes during his two lectures, like
every student, because in the final analysis, when it came to Sam, we were all his
students. I was impressed by the depth of his thought and his analytical approach
and I learned so much about the role of colonization in Europe's capital accumulation
that I still consider my experience a rare luxury for a Latin American economist.
But there was something else with Sam Moyo. He was a humble person, never one to
think arrogantly or to use his intellectual authority to impress others. He was a fine
example of a classic gentleman and I only regret I didn't have the opportunity to
work more with him. He was a key member of TEMTI and we will miss him dearly, for
he was the best example of the way in which knowledge and scientific responsibility
can blend with a deep commitment for social justice.
TEMTI’s mandate is to
provide practical and
enabling information,
as well as relevant
policy options on
issues lying at the
intersection between
economics and
environmental and
social sustainability.
Alejandro Nadal
Chair, TEMTI
Visit TEMTI’s website
MARCH 24, 2016
TEMTI NEWSLETTER
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Message from the
Commission Chair of
CEESP
Planet at the
crossroads
“We live in a time of
tremendous change, the
nature and extent of which
is the subject of intense
debate around the world.
At the heart of this debate
is the clash of immediate
human needs with their
long-term impacts on the
planet’s capacity to support
life.”
Kia
Ora members of the CEESP
Theme on the Environment, Macroeconomics, Trade and Investment (TEMTI). Thank
you for your interest and contribution to the work of the Theme. TEMTI plays an
important role in the overall work of the Commission as it covers the third pillar of
sustainable development, economics, which is too often overlooked in conservation
and environment policies. Your contribution to CEESP’s endeavours allows us to
analyse with rigour both the economic dynamics of sustainable development, as well
as new avenues for policymaking.
Both TEMTI and CEESP remain committed to the vision of a world where equity is at
the root of a dynamic harmony between humankind and nature, as well as among
peoples. This vision involves a world of diversity, productivity and integrity of natural
systems where production and consumption are sustainable and where cultural
diversity is intertwined with biological diversity capable of generating abundant and
sustainable livelihoods.
The Steering Committee of CEESP has just finished drafting the new mandate for the
Commission. This will be sent to you soon for comment. As well as retaining analysis
of economic drivers of environmental policies, one of the new areas CEESP intends to
devote attention to is examining diverse values and valuations of nature. Within this
area approaches such as Natural Capital and market-based responses to climate
change will be explored as well as the social, environmental and economic
assumptions that underpin them.
The future work of TEMTI will continue to be vital in ensuring that CEESP provides a
balanced, environmentally and socially responsible approach to sustainable
development
I look forward to meeting as many of you as possible at the World Conservation
Congress. CEESP will be holding a CEESP members meeting on September 1st so
please note the date.
Thank you again for your contribution to the expertise of the Commission.
TEMTI’s Working
Paper Series:
Economic
Perspectives on
Global Sustainability
MARCH 24, 2016
Aroha Te Pareake Mead
Chair
IUCN Commission on Environmental, Economic and Social Policy (CEESP)
TEMTI NEWSLETTER
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Message from TEMTI Chair
Planet at the
crossroads
“We live in a time of
tremendous change, the
nature and extent of which
is the subject of intense
debate around the world.
At the heart of this debate
is the clash of immediate
human needs with their
long-term impacts on the
planet’s capacity to support
life.”
In the 87th IUCN Council meeting in Haikou, province of Hainan, China, I had the
privilege to give a talk on our work on the economic drivers of environmental
degradation. Here are some highlights of that presentation.
In recent years, a number of organizations and publications have mentioned
economic growth and population dynamics as the main drivers of environmental
degradation (UNEP 2007 and 2012; IPCC 2007 and 2014; UN 2012; IPBES 2015).
But these are very general categories that encompass a multitude of different types
of events, in differing scales and with very dissimilar transmission chains. Thus, there
is a clear need to unbundle this discussion about economic drivers.
Economic growth does translate into an increment of production and consumption of
goods and services and, from this point of view it does have implications for the use
of natural resources or for the way the economy impacts the environment. But
growth is not a harmonious and uniform process. It has different rates between
sectors (and at a more disaggregated level, between branches) in an economy and
between regions. It is not a steady process and economic history shows that growth
rates vary radically in time. For example, between 1945-1975 the average yearly
growth rate of the world economy was 5.7%. In the period 1975-2000 that rate was
almost cut in half. Today the world economy has slowed down as a result of the
global financial and economic crisis.
The global economy has started to rely more and more on periodic episodes of asset
inflation (commonly known as 'bubbles'). But these episodes lead to chronic crises
that bring about serious disruptions in economic structures: inequality, bankruptcies
and fiscal deficits. Today the world economy may be facing a future of secular
stagnation or, in the best scenarios, under par growth. A high level of unemployment
for the near future is a regular forecast today. The scars left on public accounts will
have important fiscal policy implications for years to come. How will this affect the
footprint that economic growth leaves on the environment? It's hard to tell, but one
thing is clear: a crisis and its aftermath of a stagnant economy does not necessarily
spell good news for the environment.
TEMTI’s Working
Paper Series:
Economic
Perspectives on
Global Sustainability
MARCH 24, 2016
Population growth is the other factor frequently mentioned as key driver of
environmental degradation. There is no doubt that the prospect of having a total
population of 9 billion by 2050 is something that should retain our attention. But
there are also some interesting facts that need to be taken into account when
thinking of population as a driver of environmental degradation. For example, most
countries/regions have entered or are entering their demographic transitions. Global
population growth rate peaked in 1963 and has been declining ever since: 1.2%
today but probably be <1% in 2020 and <0.5% by 2050. Perhaps the main
demographic phenomenon today is urbanization and has critical implication for
consumption patterns and markets. International migration is without a doubt the
second most important demographic event.
TEMTI NEWSLETTER
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Demand for more goods and services is of course the implicit element when talking
about population growth as a driver. But here we need to take into account that
demand and the formation of preferences is not a static or rigid structure that
remains unaffected by marketing and a myriad other forces. The concept of
endogenous preferences is highly relevant here. In addition, there are deep
disparities in the use and access to raw materials: per capita consumption of raw
materials in OECD countries is 18-20 times more than in developing countries.
IUCN Commission
on Environmental,
Economic and
Social Policy
(CEESP)
Email to:
ceesp@iucn.org
The key message here is that both economic growth and population dynamics need
to be examined in disaggregated terms. These categories involve a complex set of
disparate forces that work in different dimensions. There is a clear need to
disaggregate and examine these dimensions in detail. Unbundling these categories
will allow us to refine our vision on the nature of the drivers and the ways to control
them in the context of robust conservation strategies. Using adequate analytical
instruments is an essential requisite in the study of economic drivers of
environmental degradation.
The work of our colleagues in the TEMTI network is an important contribution to the
research agenda on economic drivers. Our analysis of the economic forces behind the
degradation of the environment is a key element for the design of better and more
resilient conservation strategies, as well as for the development of policy alternatives.
Alejandro Nadal
Centro de Estudios Económicos, El Colegio de México
Chair of TEMTI
References
TEMTI’s Working
Paper Series:
Economic
Perspectives on
Global
Sustainability
The Political Economy
of Africa’s natural
resources and the
‘Great Financial
Crisis’, by Bram
Büscher
MARCH 24, 2016
IPBES (2015), “The IPBES Conceptual Framework: Connecting Nature and People”,
Current Opinion in Environmental Sustainability, Vol. 14 . ScienceDirect.com
IPCC (2007), Fourth Assessment Report. Intergovernmental Panel on Climate
Change. Geneva, Switzerland. Available at: www.ipcc.ch
IPCC (2013), Fifth Assessment Report. Intergovernmental Panel on Climate Change.
Geneva, Switzerland. Available at: www.ipcc.org
MEA (2003), Millennium Ecoystem Assessment: A Framework for Assessment. Island
Press. Available at: http://www.millenniumassessment.org/en/Framework.html
UN (2012), The Future We Want. Outcome Document of the Rio+20 Conference
UNEP (2007), Global Environmental Outlook 4. Environment for Development. United
Nations
Environment
Programme.
Available
at:
http://www.unep.org/geo/geo4.asp
UNEP (2012), Global Environmental Outlook 5. Environment for the Future We Want.
United
Nations
Environment
Programme.
Available
at:
http://www.unep.org/geo/geo5.asp
TEMTI NEWSLETTER
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Activities and News from TEMTI Members
Planet at the
crossroads
“We live in a time of
tremendous change, the
nature and extent of which
is the subject of intense
debate around the world.
At the heart of this debate
is the clash of immediate
human needs with their
long-term impacts on the
planet’s capacity to support
life.”
Recent activities by TEMTI members reflect the priorities and new developments in
our network. The following examples of work in research, consultancy and advocacy
by new and old members of our team illustrate the wide array of fields we are
covering today. We welcome those new members that share our enthusiasm and
eagerness to further develop TEMTI's priorities.
***
TEMTI sends a message of sympathy and solidarity to Sam Moyo’s colleagues and
friends at the African Institute for Agrarian Studies (AIAS), of which he was
Executive Director. AIAS is an independent policy research institution committed to
the development of agrarian systems that enhance equitable land rights and
sustainable land uses throughout Africa. AIAS does research based policy mediation
and advocacy through five core strategies: research, policy dialogues, training,
information dissemination and networking.
AIAS has been active in
the
producing
policy
documents,
training
courses
and
policy
dialogues in Zimbabwe
and the region as a
whole. The institute also
hosts the Agrarian South
Network and edits the
Agrarian South: Journal
of
Political
Economy
(www.ags.sagepub.com)
.
TEMTI’s Working
Paper Series:
Economic
Perspectives on
Global Sustainability
AIAS launched a Call for submissions for its VIII Agrarian South Summer School
– 2016, “Progressive Social Forces, Social Movements and Collective Actions in the
Contemporary Agrarian Transformations in the South.” The aim of the Summer
School, to be held in January 18 to 22, 2016 in Harare, Zimbabwe, is to bring
together a variety of social forces that have been able to challenge and influence
processes of land and agrarian reforms and transformations in the South.
***
Leontief Prize to Amit Badhuri
TEMTI congratulates Amit Badhuri for receiveing the 2016 Leontief Prize for
Advancing the Frontiers of Economic Thought, awarded by the Global Development
and Environment Institute (GDAE, Tufts University). This year's award (shared with
Diane Elson), is titled "Development and Equity," recognizes the contributions that
these researchers have made to economic understandings of development, power,
gender, and human rights.
“As the free market and waves of globalization have left some peoples behind, Diane
Elson and Amit Bhaduri demonstrate why the current theories of development have
excluded the poor and disenfranchised from the growth process,” said GDAE CoDirector Neva Goodwin. “Their cross-disciplinary work and profound understanding of
economic development is appropriately recognized in an award that bears Leontief's
name.”
MARCH 24, 2016
TEMTI NEWSLETTER
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IUCN Commission
on Environmental,
Economic and
Social Policy
(CEESP)
Email to:
ceesp@iucn.org
GDAE awards the Leontief Prize each year to leading
theorists who have developed innovative work in
economics that addresses contemporary realities and
supports just and sustainable societies. This year’s
award will celebrate their continuing efforts to expand
our knowledge of economic systems in the contexts of
globalization capital accumulation and the shifting
balance of power away from governments to markets.
The ceremony and lectures by the awardees will take
place on March 102016 on Tufts University’s Medford
campus.
Amit Badhuri is Professor Emeritus at Jawaharlal Nehru University, Delhi, and is
currently the Visiting Chair Professor in Political Economy at Goa University. He has
served as Professor of Political Economy at the University of Pavia, Italy, Reader at
the Delhi School of Economics, and Professor at the Indian Institute of Management,
Calcutta. Dr. Bhaduri’s research spans several important fields including capital and
growth theory, Keynesian and Post-Keynesian macroeconomics, and development
economics. He has published more than 60 papers and has written ten books.
***
Patrick Bond , is Professor of Political Economy, University of the Witwatersrand
Professor of Development Studies, University of KwaZulu-Natal. In a special issue of
the Journal of World-Systems Research this year, he scrutinizes the question of
whether climate activism from below can transcend the negotiators’s paralysis above
(here the pdf).
TEMTI’s mandate is to
provide practical and
enabling information,
as well as relevant
policy options on
issues lying at the
intersection between
economics and
environmental and
social sustainability.
Visit TEMTI’s website
Also this year, this time on a special issue on sustainability (Interdisciplina, Vol. 3 No.
7, 2015), Patrick analyses how the different social movements of resistance to
extractivism in South Africa remain fragmented, despite all being dedicated to
sustainability. He argues that tackling social, economic, political and ecological factors
with a more explicit structuralist critique can be useful to articulate the diversity of
movements by providing broader visions and narratives of political, economic, and
ecological change.
Patrick’s most recent book, co-edited with Ana García is BRICS: An Anti-Capitalist
Critique, London, Pluto Press; Chicago, Haymarket Press; Johannesburg, Jacana
Press; and Delhi, Aakar Press, 2015.
***
Bram Büscher is Professor and Chair of the Department of Sociology of
Development and Change at Wageningen University in The Netherlands. He does
research on the links between global capitalism and conservation, environment, and
energy issues. In his most recent projects he has investigated the relation between
new online (social) media and the worrying new levels of violence and conflict in
relation to spaces where the conservation-extract-wildlife crime nexus is intensifying
(especially in South Africa, Brazil and Indonesia).
Bram is the author of Transforming the Frontier. Peace Parks and the Politics of
Neoliberal Conservation in Southern Africa (Duke University Press, 2013). He is also
the co-editor of The Ecotourism / Extraction Nexus: Rural Realities and Political
Economies of (un)Comfortable Bedfellows (Routledge, 2013, co-edited with Veronica
Davidov) and Nature Inc: Environmental Conservation in the Neoliberal Age
(University of Arizona Press, 2014, co-edited with Wolfram Dressler and Robert
Fletcher). Since 2012, Bram is one of the editors of the open-access journal
Conservation & Society (www.conservationandsociety.org) and a book series with the
University of Arizona Press on Critical Green Engagements: investigating the Green
Economy and its Alternatives.
MARCH 24, 2016
TEMTI NEWSLETTER
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Julio Contreras works at the Association of Agricultural Development & Business
Yanapay (ADAE Yanapay), an institution aiming at eradicating poverty, gender
differences and environmental problems in rural areas in southern Peru.
Planet at the
crossroads
“We live in a time of
tremendous change, the
nature and extent of which
is the subject of intense
debate around the world.
At the heart of this debate
is the clash of immediate
human needs with their
long-term impacts on the
planet’s capacity to support
life.”
This year, Julio was appointed as the manager to the management committees in two
protected areas of the city of Arequipa (Reserva Paisajística de la Subcuenca de
Cotahuasi y Reserva Nacional de Salinas y Aguada Blanca). The committees seek to
strengthen the economy of rural communities living within protected areas.
“We train and provide technical assistance in activities such as: raising llamas
and alpacas, cattle, textile, crafts, tourism and aquaculture. Of course the
bottleneck is marketing, but our proposal includes the insertion of products
(raw and value-added material) platforms promotion (virtual and fairs), with
some groups have managed to reach the export (with associations), but with
the communities we are still in the early stages,” says Julio in a letter to
TEMTI.
Partnering with over 30 community producers associations, ADAE Yanapay applies
and develops an organizational strengthening program that works to improve the
quality of life of rural communities promoting their most important economic
activities in a socially and environmentally sustainable way.
According to ADAE Yanapay, “the
strategies that develop from within
these
highly
committed
organizations are the only ones that
can be successfully adapted to the
local conditions and get the peoples’
support. Only those strategies can
offer a sustainable response in the
fight against poverty in Peru.”
Visit ADAE Yanapay’s website: www.adaeyanapay.org.
***
TEMTI’s Working
Paper Series:
Economic
Perspectives on
Global Sustainability
Warren G. Lavey is Adjunct Professor at the University of Illinois and a Consultant
on environmentally preferred purchasing to the U.S. General Services Administration,
U.S. Environmental Protection Agency, and the State of Illinois. He’s recently
developed university courses on legal protections for natural areas, climate change
and public health, and monitoring and evaluating sustainability projects.
In a recent article to the Conservation Finance Alliance (co-authored with Stephanie
Lavey), Warren examines how environmentally preferred purchasing can signal rising
opportunities for conservation financing, and provides examples on three
developments: 1) customers in many markets can find vendors financing sustainable
management of natural resources; 2) some manufacturers and retailers are leaders
in sustainable purchasing as they reduce their indirect (supply chain) emissions and
use of natural resources; and 3) purchasers have growing access to sustainability
analytics, metrics, certifications and guidance. Greater efforts are however necessary
to capture the potential benefits of purchasers’ selective spending. Two steps towards
more customer-driven conservation financing involve enforcement and prioritization.
Warren can be contacted at: lavey@illinois.edu.
MARCH 24, 2016
TEMTI NEWSLETTER
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Oxford Adaptation Academy
Last August was the 6th edition of the Oxford Adaptation Academy. This is an intense
three weeks training space aimed to help practitioners, professionals and
government officials to understand the challenges of climate change adaptation and
develop skills required to make sound decisions under uncertainty.
IUCN Commission
on Environmental,
Economic and
Social Policy
(CEESP)
Email to:
ceesp@iucn.org
Claudia Múnera (CEESP Member) took
part in this space, alongside with
participants from different parts of the
world, backgrounds and organizations
including the UNFCC, NGO’s, and
government officials.
The
Adaptation
Academy
is
a
collaborative effort between the Global
Climate Adaptation Partnership (GCAP)
and the Smith School of Enterprise and
the Environment at The University of
Oxford.
Its aim was to learn more about all the complex social, environmental and economic
issues interlinked with the climate change adaptation challenges that affect the
decision making process. The academy made an emphasis in looking for collaborative
approaches to implementation, and understand the role of private sectors and
markets as important players in the adaptation arena.
The main themes of the academy include: understand our role as change makers
both in our own careers and organizations, see adaptation as a process linking
climate science, vulnerability and decision making, and provide participants with
technical skills to analyze the adaptation options and project development.
TEMTI’s Working Paper
Series:
Economic Perspectives
on Global
Sustainability
Effectiveness of clean
coal technologies in
global carbon emission
mitigation: evidence and
summary, by Oluwasola
E. Omoju
Next year the academy will be held again in August. For more details on the academy
contact Lesley Downing (ldowning@climateadaptation.cc). Claudia Múnera can be
contacted at: Claudia@grupolaera.com // rmunera@yahoo.com
New Members
TEMTI welcomes Prof. Philip M. Fearnside to the network. Fearnside is a Research
Professor in the Department of Environmental Dynamics at the National Institute for
Research in Amazonia (INPA) in Manaus, Amazonas, Brazil. He is a permanent
resident in Brazil where he has lived in Amazonia for 39 years doing ecological
research. In addition to Latin America, he has field experience and publications
include India, Indonesia, China. He completed his Ph.D. in 1978 in the Department of
Ecology and Evolutionary Biology, Division of Biological Sciences, University of
Michigan, Ann Arbor, Michigan.
Fearnside's research since 1974 has been directed at the estimation of human
carrying capacity of tropical agro-ecosystems. His work since 1985 has been
organized around the objective of converting the environmental services of
Amazonian forests into a basis for sustainable development for the rural population of
the region, taking the place of the current pattern of forest destruction. He has
authored over 500 professional publications and over 250 popular and outreach
publications on these and related problems of environment and development. He also
spreads these messages through extensive public speaking, having delivered over
850 speeches.
Honors include Brazil's National Ecology Prize, the UN Global 500 award, the Conrad
Wessel prize, the Chico Mendes prize, the Scopus prize (from Elsevier & CAPES) and
membership in the Brazilian Academy of Sciences. In 2006 he was identified by
Thompson-ISI as the world’s second most-cited scientist on the subject of global
warming. In 2011 he was identified as the world’s 7th most-cited scientist in the area
of sustainable development.
Philip’s papers are available at http://philip.inpa.gov.br.
MARCH 24, 2016
TEMTI NEWSLETTER
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***
Planet at the
crossroads
“We live in a time of
tremendous change, the
nature and extent of which
is the subject of intense
debate around the world.
At the heart of this debate
is the clash of immediate
human needs with their
long-term impacts on the
planet’s capacity to support
life.”
TEMTI warmly welcomes
Carolina
Aragon
(Mexico City, 1988) as
TEMTI’s
online
community
manager.
Carolina is a Biologist by
National
Autonomous
University of Mexico.
Her focus is on science
communication through
digital
media.
Her
experience
in
digital
media encompasses the areas of social media management and public relations, web
user experience and performance analysis and enhancement. Carolina is certified by
Google in Analytics and AdWords.
Follows us @IUCN_TEMTI
***
Commentary
COP 21: emerging framework and closing windows
Francisco Aguayo (UNU-MERIT)
As a new round of negotiations of the UNFCC approaches, optimistic expectations
about a climate deal glitter across the media. The main details of the agreement to
be discussed at the Conference of the Parties (CoP) in Paris this December are yet to
be defined. According to agreement’s draft, neither the framework that determines
national commitments, nor the main economic tools to curb emissions will likely
change. From this perspective, and despite important shifts in the political
environment, the agreement will most likely fall short of producing an effective
framework to stop dangerous warming.
The geist of hope surrounding the Paris CoP comes from the policy change in major
producers of greenhouse gases (GHG), U.S. and China. In particular, the secular
reluctance of the U.S. to align mitigation goals with the rest of industrialized
countries appears to have receded. But these advances appear as minor steps when
assessed against required action.
Distant goals, weak roles
TEMTI’s Working
Paper Series:
Economic
Perspectives on
Global Sustainability
The CoP 16 in Cancun (Mexico) agreed to limit global warming to +2°C, which means
that additional emissions along the century should remain between 800 to 1,000
GtCO2 (see Friedlingstein et al., 2014; Raupach et al., 2014). While this constraint at
current emission rates is already challenging, one must not overlook the fact that the
energy supply infrastructure already in place will use up 50% of the remaining space
(Raupach et al., 2014). The agreement leaves open the possibility of revising down
the target if new scientific evidence indicates the need to reduce acceptable warming
levels, which some studies indicate s already the case (Hansen, et al., 2008, and
Lenton et al., 2008, Hansen et al., 2013). Hansen et al. (2013) for example argue
that, due to slow feedback effects not included in IPCC climate models, an additional
1,000 GtCO2 would guarantee incontrolable warming. The window of opportunity for
avoiding dangerous damage and increasing adaptation costs is thus rapidly closing.
In contrast, global emissions’ levels accelerated all the way through the 1990’s and
the 2000’s, in line with high-warming pathways leading to +4°C to +6°C in IPCC
models. Shifting emissions off that track and keeping climate change to +2°C (which
may not be enough) requires to reduce current global emissions by 40% to 70% by
2050, with respect to the year 2010 levels, and reach near zero emissions by 2100
(IPCC, 2014, p. 82).
MARCH 24, 2016
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Up to now, there is no agreement as to how the remaining athmospheric space is
going be shared among nations. The safer emission reduction pathways, considering
the principle of shared but differentiated responsibility (using historical responsibility)
indicate that poorer nations must peak emissions around 2025 and reduce them at
rates of 6%-8% per year, while richer nations require much faster reduction rates (at
least 10% a year) to reduce emissions by 70% to 2025 and by 90% to 2050. The
lack of clear rules for determining national responsibilities adds uncertainty to the
outcome of climate action within that shrinking window.
IUCN Commission
on Environmental,
Economic and
Social Policy
(CEESP)
Email to:
ceesp@iucn.org
Intended Nationally Determined Contributions (INDCs) are a poor substitute of
effective commitments, as long as they remain detached from physical constraints of
the climate system. At their current levels, INDCs are insufficient for keeping
warming at +2°C (OECD, and Climate Analytics). Negotiations have failed to deliver
rules for national contributions that consider historical responsibility, equity and
capability in determining national responsibilities, which could contribute to a more
robust agreement (see Baer, Athanasiou, Fieldman and Kharta, 2008). The risk of
trespassing dangerous warming will grow continuously unless both the level of
commitment and actual GHG mitigation accelerate, which is less likely without a
robust framework at the national level. The outcomes of the Paris CoP must be
measured and assessed along this line.
Economic instruments: weak mitigation drivers
The other main issue is the nature of policy tools and mitigation mechanisms. The
Flexible Mechanisms (carbon pricing schemes, clean development mechanisms, joint
implementation, and REDD+) will likely be preserved in their current shape. These
tools were implemented with the intention of harnessing market forces to work in
favor of de-carbonization. Evidence from the last decade shows that these tools are
still a long way from inducing de-carbonization at the required scale, much less of
producing accelerated mitigation.
TEMTI’s mandate is to
provide practical and
enabling information,
as well as relevant
policy options on
issues lying at the
intersection between
economics and
environmental and
social sustainability.
Visit TEMTI’s website
The main flexible mechanism is carbon trading. Emission trading schemes have
quickly developed in the last decade, expanding in 40 countries and regions to cover
up to 12% of energy-related GHG emissions (World Bank, 2014). Recall that carbon
markets consist of a cap (an initial set of emission allowances) and a trading system
(that allows firms to buy and sell allowances to meet their quotas). Trade would allow
participants to meet their quotas at the lowest cost. Finally, the cap should be
adusted progressively in order to make prices closer to the true emission cost. In
average, prices in trading schemes have remain around $7-12 USD per ton of carbon
(World Bank, 2014), a long way below the most conservative estimations of social
costs of carbon, which range form $21 (EPA) to $83 (UK’s Department of Energy and
Climate Change). More effective carbon pricing would need to be closer to more
realistic social carbon costs in the order of $28-$893 (Ackerman and Stanton, 2010)
or to abatement costs (required for achieving zero emissions by 2100), which range
between $150-$500. Carbon pricing is also completely at odds with other economic
policies. Subsidies to fossil fuels alone amount to $115 USD/ton, covering 13% of
energy related emissions (IEA, 2013).
MARCH 24, 2016
IUCN Commission
on Environmental,
Economic and
Social Policy
(CEESP)
Email to:
ceesp@iucn.org
TEMTI NEWSLETTER
P.
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The reasons behind low prices are not accidental but rather a result of major design
flaw of offset markets (Lohman, 2006). A first problem is that adjusting the cap is
extremely difficult. For example, current surplus allowances in the European
Emissions Trading System (EU ETS) amount to 2.1 billion tCO2. Excess initial supply
of allowances (offered at no cost during the first two rounds of the market) has now
combined with falling energy demand a result of the crisis, inflating allowance surplus
from the demand side. The EU ETS has planned to delay the supply of 800 million
tCO2 in the 2014 allowances, hoping to increase short-run scarcity and increase
prices, but without actually adjusting the cap. There may be another 1.5 billion tons
of “hot air” (excess permits) in non-ETS sector allowances (transport, agriculture,
housing, and waste) in the EU’s Effort Sharing Decision (2013-2020).
The second problem with emission trading schemes is they lack an in-built correction
mechanism that adjusts the cap to potential emission reductions. If mitigation
accelerates, e.g by the adoption of low-carbon technologies, the supply of allowances
will increase, thus reducing the price of carbon. Trading hinders the stimulus to
innovation on both ends of the market, reducing gains to sellers and costs-savings to
buyers. These flaws further support the proposition of a global carbon fee as a base
for internalizing carbon costs (Hansen et al., 2013).
Physical and financial lock-in
It is true that fossil fuels are “cheaper” because their negative effects is not paid for,
and because they receive subsidies. But it is key to understand as well that they are
locked-in in our current socio-economic structures (Unruh, 2000). The lock-in effect
means that, despite the fact that negative effects and cost-effective alternatives are
known, the prevalence of fossil fuels is is perpetuated by the self-reinforcing
technologial, and socio-economic effects: interdependence and network economies,
institutional structures like performance standards and users’ preferences, and
political leverage that biases choices and extends privileges. An ordered transition to
low-carbon energy requires not only adequate energy prices and taxes, funding, and
incentives, but also aligned policies and rules, coupled with coordinated, long-term
investments all across the energy system (Grübler at al, 2012).
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Resolving the Food
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since 2007, by Tim
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Murphy
There are many aspects of this transition that deserve attention, including broader
sustainability issues, the extent and depth of the global economic crisis, as well as
fundamental aspects of climate justice. But one critical aspect, completely unattended
by the current climate framework is the role of financial markets. Climate stabilization
thus implies then that that 60% to 80% of ready available fossil fuel reserves (2,860
Gt CO2) must stay in the ground. Along the last decade, financial derivatives like
futures and options channelled massive resources into non-conventional fossil fuels’
infrastructure, hand in hand with the commodity “super-cycle.” The 200 top fossil fuel
companies have a market value of $4 trillion and debt of $1.5 trillion; another $6
trillion USD could be allocated to developing fossil fuels along the next decade. If
three quarters of all carbon is unburnable most of those assets would be left
stranded, a risk not yet discounted in capital markets. A low carbon emissions
scenario would require equity valuations of energy firms to be reduced by 40-60%.
Widespread economic effects are to be expected if the carbon bubble bursts, as public
and private pension plans hold 46.8% of all oil and natural gas company shares. The
required accelerated transition to a low-carbon economy requires thus to keep
finance in check with the needs of climate stabilization.
MARCH 24, 2016
Planet at the
crossroads
“We live in a time of
tremendous change, the
nature and extent of which
is the subject of intense
debate around the world.
At the heart of this debate
is the clash of immediate
human needs with their
long-term impacts on the
planet’s capacity to support
life.”
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The decisions to be taken at the Paris COP are charged with consequences to the
future of human society. The framework of the negotiations is however to be lagging
further and further behind actual needs. The dimensions and obstacles posed by
economic and financial forces driving emissions require not only a fast upgrading of
market-based policy instruments, but also a widespread discussion about how
changes leading to deeper technical and economic re-structuring can can be brought
about.
References
Ackerman, F. And L. Stanton (2010), The Social Cost of Carbon, Economics for Equity and the
Environment Network.
Baer, P., G. Fieldman, T. Athanasiou, and S. Kharta (2008), “Greenhouse Development Rights:
towards an equitable freamework for global climate policy,” in Cambridge Review of
International Affairs, 21(4), 649-666). For an update version, go here:
http://www.ecoequity.org/wp-content/uploads/2014/11/National-fair-shares.pdf .
Friedlingstein, P. et al., (2014) Persistent growth f CO2 emissions and implications for reaching
climate targets, in Nature GeoScience, Review Article, 21 September 2014,
DOI:10.1038/NGEO2248.
Hansen, J. et al. (2008), “Dangerous human-made interference with climate: a GISS modelE
study,” in Atmospheric and Chemistry and Physics no. 7, pp. 2287–2312.
Hansen, J., Kharecha, P., Sato, M., Masson-Delmotte, V., Ackerman, F., Beerling, D. J., …
Zachos, J. C. (2013). Assessing “dangerous climate change”: required reduction of
carbon emissions to protect young people, future generations and nature. PloS One,
8(12), e81648. doi:10.1371/journal.pone.0081648
IEA (2013), Redrawing the climate-energy map. World Energy Outlook Special Report,
International Energy Agency, Paris.
IPCC (2014), Climate Change 2014: Synthesis Report, R.K. Pachauri and L.A. Meyer (eds.),
Geneva, Switzerland.
Lenton, T., et al. (2008), “Tipping Elements in the Earth’s Climate System”, Proceedings of the
National Academy of Sciences of the United States, Vol. 105, No. 6, Washington, DC,
pp. 1786-1793.
Meyer, A. (2000), Contraction and convergence: the global solution to climate change, Green
Books for the Schumacher Society, Totnes, Devon, UK.
Raupach, M.R. et al., (2014), “Sharing a quota on cumulative carbon emissions,” in Nature
Climate Change, 21 September, DOI:10.1038/NCLIMATE2384.
Rockström W. S., et al. (2009). Planetary Boundaries: Exploring the Safe Operating Space for
Humanity. Ecology and Society, 14(2), 32.
World Bank (2014), Carbon Pricing State & Trends, The World Bank Group, Washington.
MARCH 24, 2016
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Forthcoming Events
IUCN Commission
on Environmental,
Economic and
Social Policy
(CEESP)
Email to:
ceesp@iucn.org
Held once every four years, the IUCN World Conservation Congress brings together
several thousand leaders and decision-makers from government, civil society,
indigenous peoples, business, and academia, with the goal of conserving the
environment and harnessing the solutions nature offers to global challenges.
The Congress aims to improve how we manage our natural environment for human,
social and economic development, but this cannot be achieved by conservationists
alone. The IUCN Congress is the place to put aside differences and work together to
create good environmental governance, engaging all parts of society to share both
the responsibilities and the benefits of conservation.
The Congress is the place where IUCN’s more than 1,300 Member organisations
exercise their rights, influence the global conservation agenda and guide IUCN’s work
plan for the four years to follow.
The next Congress will take place 1-10 September in the Hawaii Convention Center,
in the Hawaiian capital, Honolulu. It is being hosted by the State of Hawaii with the
support of the Department of State of the USA.
Visit the Congress Portal
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TEMTI’s Working
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The Wageningen University and the School of Oriental and African Studies (SOAS),
University of London are calling for abstracts and presentations to the upcoming
Conference Political Ecologies of Conflict, Capitalism and Contestation (PE3C), organized by the to be held in Wageningen 7-9 July 2016.
We invite TEMTI members to submit an abstract and attend! More information about
the Conference at this link and at https://pe3c.wordpress.com/.
***
Economic Perspectives on Global Sustainability Issues
TEMTI’s working papers series is designed to provide reliable information and
rigorous analysis on the human dimensions of environmental change. Its main
objective is to open a much-needed space for reflection and understanding of the
complex forces that are driving social inequality and environmental degradation
worldwide.
Contributions to the series will come from research carried out by TEMTI’s network of
experts. Economic Perspectives on Global Sustainability aims to strengthen
communication and collaboration between the different communities of the
International Union for the Conservation of Nature, as well as within its worldwide
constituency.