Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts

Tuesday, February 22, 2011

Blueprints for saving the world and producing green growth

brick making kilns in India which produce black soot
Two new United Nations-sponsored reports offer hope that the world will be able to reduce the severity of climate change – and bring other benefits to its people.

One report from the United Nations Environment Programme (UNEP) argues that there are plenty of opportunities for creating wealth, jobs, a more pleasant environment and improved social equality by transferring subsidies that support polluting activities to those supporting low carbon ones, up to a value equivalent to about 2% of global GDP.

Another, Integrated Assessment of Black Carbon and Tropospheric Ozone, also argues that by imposing strict limits on emissions of "black carbon" soot, methane and tropospheric ozone - a greenhouse gas that is also a significant component of smog - would clear the air, reduce human deaths and improve crop yields.

It would also reduce the impacts of climate change in the short term by 0.5 degrees Celsius (0.9 Fahrenheit) to the equivalent of a carbon dioxide presence in the atmosphere of 450 ppm.

Black carbon, caused by incomplete burning mainly of fossil fuels and wood, is blamed for accelerating global warming by soaking up heat from the sun. Soot can darken snow and ice when it lands, hastening a thaw such as in the Arctic or Himalayas.

Ozone is not directly emitted but is produced from precursors including methane and carbon monoxide. The troposphere is the lower atmosphere; higher up, ozone is beneficial as un ultra-violet sunshield.

Many studies show that existing pledges made at Cancun for cuts in greenhouse gas emissions are insufficient to reach the 2 degree limit, widely viewed as a threshold to dangerous change from floods, heatwaves, desertification and rising sea levels. But the measures outlined in the report could buy the world more time to implement the measures in the other report, outlined below.

"This is not an alternative to carbon dioxide reductions, it's complementary," commented Johan Kuylenstierna, of the Stockholm Environment Institute, scientific coordinator of the report, produced also with help from the World Meteorological Organization and NASA Goddard Institute for Space Studies.

Proposed measures include cuts in flaring of natural gas, curbing gas leaks from pipelines and reducing methane emissions from livestock. Poor countries should make wider use of cleaner-burning stoves, and open-field burning of farm waste should be banned.

The scientists say that achieving widespread implementation of the measures they recommend would be most effective if it were done at a country or region level.

Transition to the green economy



The other report, Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication, makes a number of positive suggestions, again with multiple spin-off benefits.

It argues that investing just 2% of global GDP into ten key sectors can kick-start a transition towards a low-carbon, resource-efficient economy. These include agriculture, buildings, energy, fisheries, forests, manufacturing, tourism, transport, water and waste management.

The sum, currently amounting to an average of around $1.3 trillion a year , backed by forward-looking national and international policies, would grow the global economy at around the same rate if not higher than those forecast under current economic models.

The report comprehensively debunks the myth of a trade-off between environmental investments and economic growth and instead points to a current "gross misallocation of capital".

Removing existing and harmful subsidies in energy, water, fisheries and agriculture sectors, alone, would save 1-2% of global GDP a year, which could be used for the transition to the green economy.

The figure of 2% of global GDP assumed is a fraction of total gross capital formation; about 22% of global GDP in 2009.

The report says that greening the economy generates growth - in particular gains in natural capital (biodiversity and resources) - and in fact a higher growth in GDP and GDP per capita than business-as-usual. "It is expected to generate as much growth and employment – or more – compared to the current business as usual scenario, and it outperforms economic projections in the medium and long term, while yielding significantly more environmental and social benefits," the authors say.

The report contains many case studies to illustrate this, for example in India, where over 80% of the $8 billion National Rural Employment Guarantee Act, which underwrites at least 100 days of paid work for rural households, invests in water conservation, irrigation and land development. This has generated three billion working days-worth of employment benefiting close to 60 million households.

Such measures can therefore contribute to poverty alleviation because there "is an inextricable link between poverty alleviation and the wise management of natural resources and ecosystems, due to the benefit flows from natural capital that are received directly by the poor".

New jobs will be created, which over time exceed the losses in “brown economy” jobs.

The transition towards a green economy is already happening on a scale and at a speed never seen before.

Therefore, the report concludes: “world leaders, civil society and leading businesses must engage collaboratively to rethink and redefine traditional measures of wealth, prosperity and well-being. What is clear is that the biggest risk of all would be to continue with the status quo."

Friday, December 21, 2007

Recommended new year's present

The Low Carbon Kid recommends - of all the boooks out right now on sustainable development:


TOWARDS A SUSTAINABLE GLOBAL ECONOMY
By Worldwatch Institute

• From car-sharing and carbon taxes to fair trade and zero-waste cities, there are many ways to reach a more sustainable global economy – the focus of this year’s State of the World
• Updated annually providing information on the latest emerging markets and opportunities, this is ‘the environmentalist’s bible’ (Times Higher Education Supplement)
• ‘Essential reading’ – The Good Book Guide

In this 25th edition of State of the World – long established as the most authoritative and accessible annual guide to our progress towards a sustainable future – the studies pay particular attention to the many innovations in economic policy and business practices that lead us towards a more sustainable global economy.

Published annually in 28 languages, State of the World is relied upon by national governments, UN agencies, development workers and law-makers for its authoritative and up-to-the-minute analysis and information. It is essential for anyone concerned with building a positive, global future.
Get it here!

Tuesday, October 16, 2007

Darling, I fluffed my policies - Pre-Budget Report and Comprehensive Spending Review

Ken Livingstone explains basic economics to Gordon Brown at the launch of Crossrail

Ken Livingstone explains basic economics to Gordon Brown at the launch of Crossrail

Alistair Darling's first Pre-Budget Report and Comprehensive Spending Review missed so many opportunities to green the economy and carry out the recommendations of the Stern Report commissioned by his own Treasury that even Robin Hood with his bow and arrow, blindfolded, could have missed less.


And far from stealing from the rich to give to the poor (in the case of private equity raiders) or from the fossil fuel lobby to give to the sustainability lobby, his efforts are like a sailor furling a single sail when a hurricane is on the way.

The Low Carbon Kid agrees with the BBC's assessment of the measures announced, more or less, but presents below, as usual in the interests of objectivity, a summary of the relevant policy changes.

He wades through the verbiage so you don't have to.

Rail networks


The largest was already public news - £15 billion of Government funding in the rail network over five years, through a national target to increase the network's capacity, including provision for Crossrail.

A new Public Service Agreement is intended to improve the transport networks that support economic growth by managing urban traffic routes and the strategic road network and on the rail network.

Crossrail, a monumental engineering project that has been a dream for many for 15 years, will be financed one third each by businesses, taxpayers and passengers.

The Government's third is a DfT grant of over £5 billion during Crossrail’s construction.

The Crossrail Hybrid Bill is likely to receive Royal Assent in summer 2008 with construction underway during 2010 and trains running from 2017.

Flood prevention


Mr Darling also announced an increase in funding for flood and coastal erosion risk management from £600 million in 2007-08 to £800 million in 2010-11, which was criticised by insurance companies and local government chief executives as insufficient and too late.

But the Government said it would also spend around £10 million a year introducing a flood adaptation toolkit to help communities adapt to change where constructing defences is not the most appropriate means of managing flood and coastal erosion risk.

Waste


£2 billion of funding will be provided through the Private Finance Initiative (PFI) to help local authorities invest in more sustainable waste management options.

PFI credits for local authority waste projects will rise from £280 million in 2007/08 to £700 million in 2010/11.

Fuel poverty


The Warm Front programme, which tackles fuel poverty and energy efficiency, will continue and the related Carbon Emissions Reduction Target obligations on energy suppliers will expand.

Environmental Transformation Fund


A £1.2bn Environmental Transformation Fund, first announced in June 2006, will support the deployment of new energy technologies in the UK and abroad.

An "£800 million international window" for the Fund was already proclaimed in March, "to finance overseas development projects" for "poverty reduction and environmental benefit".

To this has been added £400m from Defra, over three years, to "provide investment in new energy technologies here at home", Mr Darling said.

The idea of the domestic part of the EFT is to "provide the sector with the confidence it needs to invest in innovation," said John Hutton, BERR minister.

He said the EFT would work closely with the Technology Strategy Board and the new Energy Technologies Institute, which has a £1bn budget over ten years.

The latter are engaging in R&D in these technologies.

Promising ones emerging from this process will then be helped to become attractive in the marketplace by the ETF through the Carbon Trust, in programmes such as their work to accelerate cost-effective organic solar photovoltaic cells (see other news item).

The Fund will also finance interest-free energy efficiency loans for small and medium-sized businesses via the Carbon Trust, and through Salix Finance in public sector revolving loan schemes.

Reducing emissions from deforestation is also "a key aim" of the Fund and £50m of it will be used for this purpose in the Congo Basin, by promoting sustainable forestry.

The international side of the Fund is handled by the Department for International Development, and the World Bank will deliver this.

The fund may increase further in the future, for example to encompass support for the UK carbon capture and storage demonstration project, which is not currently included.

Air travel


Air Passenger Duty is to be replaced with a ‘per plane’ tax from 1 November 2009 toencourage airlines to make more efficient use of flights.

The Government will hold a consultation on this in the New Year.

Also, from 1 November 2008, passengers on ‘business class only’ flights will become liable for the standard rate of APD, correcting an anomally.

APD rates will remain at their current level for 2008-09.

Aid


Overseas aid as a share of national income (GDP) is to rise from 0.37% in 2007-08 to 0.56% in 2010-11, returning it to levels in earlier years and meeting promises made at the Gleneagles Summit.

A PSA aims to reduce poverty in poorer countries through quicker progress towards the Millennium Development Goals.

Emissions Trading Scheme


Hilary Benn said that the Government will press the EU for a scarcity of allowances and an increase the use of auctioning for EU Emissions Trading Scheme (ETS) permits for Phase III, post-2012, with a "significant" increase in that level for large electricity producers to "tackle windfall profits that have occurred in this sector".

Meanwhile just 7% of allowances in Phase II (2008-12) will be auctioned, plus any from closures or surplus from the New Entrants Reserve.

The European Commission is expected to publish its proposals on the future of the EU ETS post-2012 in December.

Microgeneration


A disincentive for business to install solar panels and other renewable energy technologies has been removed.

Currently, this can trigger an increased liability for business rates.

However, the Government will no longer include microgeneration investments in ad hoc re-assessments of business rates liability from 2008.

These will only be taken into account at the five-year re-valuation of business rates, providing up to five years' worth of benefit to ratepayers.

Transport and biofuels


An earlier decision to seek state aid clearance for the inclusion of the cleanest biofuel plant in Enhanced Capital Allowance (ECA) has been reversed, because it's not seen as worth the trouble.

Instead, the Renewable Transport Fuel Obligation will target production of the cleanest and most sustainable biofuels.

Biofuels producers can still seek financial assistance to ensure cleaner fuel production through investing in good quality CHP installations, which are eligible for ECAs.

Also, the current duty incentive for biofuels will be extended to biobutanol on a pilot basis.

Climate change agreements


Over 50 energy intensive sectors can now get an 80% discount on the Climate Change Levy in return for signing climate change agreements (CCAs) under which firms agree to improve energy efficiency and/or reduce emissions.

This scheme will now continue until 2017.

Housing


To help deliver the Government’s target of 2 million new homes by 2016, a new Housing and Planning Delivery Grant has been allocated £500m over three years.

Over the same period £1.7bn has been allocated for infrastructure such as schools and transport in Growth Areas, the Thames Gateway, New Growth Points and eco-towns.

The Government announced a new PSA to increase long-term housing supply and affordability, with increases in spending on housing from £8.8bn in 2007-08 to £10bn in 2010-11.

Friday, March 09, 2007

Public opinions and market opinions

Some recent statistics on Employment and financial benefits of RE and public opinion on climate change policies

Public opinion

According to a Eurobarometer survey in all European Member States, 87% of Europeans are concerned about the climate change.

About the same number (82%) think that their energy use has an impact on the climate and 83% would support a minimum target for renewable energy sources.

Almost two thirds (62%) of the citizens think EU-agreed measures are the best way to tackle energy-related issues.

There is less agreement on how such measures should be implemented.

One third prefers taxing, one third thinks public funding of research would be the best option and the others think that prohibiting inefficient technologies would stimulate energy innovation best.

Nuclear energy is not generally seen as the best way to reduce CO2 emissions.

About 60% of Europeans want to decrease the share of nuclear energy, and only 30% want to build more nuclear power plants.

Employment and financial benefits of RE

The world is on the brink of an energy revolution that will dominate financial markets for years and provide a huge stimulus to global economic growth, according to the latest issue of Barclays Capital's influential Equity Gilt Study.

Investments in alternative energy sources are expected to grow to between $6.2bn and $8.8bn by 2009 as decades of U.S. and European research and development mature.

In 2005 Britain's environmental industries had a turnover of £25bn, according to the DTI, a figure projected to grow to £46bn by 2015.

With 13% growth last year, Germany’s renewable share in overall energy demand caused a renewed growth of jobs in the renewable energy sector.

In 2006 the number of employees working in the German renewables industry passed the 200,000 threshold.

Scottish Renewables has revealed the results of research into the economic impact of its members, the first study of its kind in Scotland.

The results show that 2,596 people are employed by SRF members in Scotland, and that the members of SRF had a combined turnover of £550m in 2006.

Employment in the 'renewables sector' is expected to grow sixfold by 2010 in the south west of England.

Meanwhile, a report from the investment bank Lehman Brothers, set out the position starkly - companies that adapt to the challenges of climate change will win friends and make money.

Those that do not will struggle to survive.