Climate Change 2

1. Climate Change 2 Pol 358 Week 9

2. Overview • Climate Change • Last week- Energy, Canada and Climate Change • This week- Copenhagen and policy options • Note- variety in readings and films.

3. Challenges of Change • Expense, investment. • Stern Report 2006 (more expensive not to tackle CC) • Climate change… is the greatest and widest-ranging market failure ever seen Stern Review: The Economics of Climate Change, 2007 • Federal foot-dragging. In 2007 Bill C-288 passed. An Act to ensure Canada meets its global climate change obligations. Government came out with report, NREE has evaluation report. • Information.new policy at Enviro Can scientists need permission to interview. Down 80%.

4. Climate Change Issues • Ethical • What is ‘fair’. • Climate debts • Domestic distribution of costs • Intergenerational equity • Implementational • What is effective? • Efficient? • Possible within current parameters?

5. Responsibility • Polluter pays principle- widely accepted • Ability to pay

6. Evaluating Solutions • Environmental outcomes • Distributive effects, equity • Efficiency • Cost-effectiveness • Administrative simplicity • Economic impact (competitiveness) • Political acceptability • Different criteria matter to different constituencies

7. Solutions • Public policy interventions: • Command and Control • Laws, regulations, standards, caps • Market based policies • Tradeable permits • Subsidies, grants • Public investment (infrastructure, new ‘green’ crown corps.) • Pal- ‘do nothing’ is also a policy choice • Most argue that carbon pricing is necessary but not sufficient. • From Above: International co-ordination/coalitions/ ‘peer pressure’ • From Below: civil society direct action.

8. Copenhagen vs Kyoto • Under UNFCC there are a number of Conference of the Parties. • Copenhagen was 7-18 December, 2009. Kyoto 1997. • Goals: • medium-term emission cuts by industrialised nations, • action by developing countries to limit the growth of their emissions, • and financial commitments for mitigation and adaptation. • phase 1 was to start with OECD and move to larger developing nations in phase 2. • Parties: • Kyoto was mostly OECD (Annex 1). Copenhagen was Annex one and beyond (included Brazil, South Africa, for example). • More than 15,000 participants took part in the two-week conference, and over 60 heads of state and government • The Accord obliges developed countries to provide financial resources, technology and capacity building for developing countries to implement adaptation actions. Developed countries have committed to provide US$ 30 billion from 2010-2012 for adaptation and mitigation. Priority will be given to least developed countries, small island States and Africa. Developed countries have also committed to the goal of jointly assembling US$ 100 billion a year by 2020 for developing countries. 

9. Copenhagen vs Kyoto 2 • The Kyoto Protocol is an international binding agreement requiring 37 industrialised countries and the European Community to make emission cuts. The Protocol entered into force in 1994 and has been ratified by 192 nations. The Copenhagen Accord is a high level political understanding and letter of intent that offers to reduce national carbon emissions. • Kyoto targets- avg of 5% below 1990 by 2012. Copenhagen- no binding targets. Places cap on the temperature rise to 2 degrees C. • Pledges made by developed, developing and least developed countries regarding national mitigation action are voluntary and not legally binding. • Kyoto had JI, CDM and emissions trading as mechanisms. Copenhagen doesn’t specify mechanisms. • The Accord has also abandoned the comparison of emission reductions with the 1990 base year, allowing countries to establish their own base year as a reference point for GHG reductions.

10. Copenhagen 3 • The IPCC also concluded in its Fourth Assessment Report that industrialized countries need to reduce their combined GHG emissions by 25–40% below 1990 levels by 2020, and by 80–95% below 1990 by 2050, to have a chance of avoiding a 2°C temperature increase. • we are the only country to have accepted a legally binding Kyoto emissions target and then opted not to try to meet it.

11. In Canada • Canada 56th out of 57 countries in the Climate Change Performance Index • In March 2008, the government announced an update to its regulatory framework. The update set targets for 2018 at the level of carbon capture and storage (CCS) technology for all new coal and oil sands facilities that come on stream after 2012. (Note, however, that this is not a requirement to implement CCS, as industry can meet the targets through emissions trading.) • 1BN Climate Fund was changed to transit tax credit (free rider prob). • 5 percent renewable content in gasoline takes effect in September 2010 and a 2 percent federal mandate for renewable content in diesel takes effect in 2011.

12. Canadian Government • The Government of Canada is committed to reducing Canada's total greenhouse gas emissions by 17 per cent from 2005 levels by 2020. • We are also committed to: • the goal of having 90 percent of Canada's electricity provided by non-emitting sources such as hydro, nuclear, clean coal or wind power by 2020; • introducing tough new regulations to limit greenhouse gas emissions from the automotive sector; • continuing to advance the Clean Energy Dialogue with the U.S. Administration; • investing more than $2 billion through our Economic Action Plan to protect the environment, especially through technological transformation, while stimulating our economy; and • playing an active and constructive role at the UN climate change talks. • In April 2007, we announced Turning the Corner, however, following the economic downturn and the renewed engagement by the new US Administration, we took the opportunity to fine-tune our approach to tackling climate change.

13. Provinces • Ontario. 2009. Green Energy Act. • FIT vs RESOP • Community Energy • Local Purchase requirements • no Canadian government, in addressing the challenge of climate change, has been willing to take on the oil and gas industry in this country, or even to approach the question of changes in behaviour and lifestyles. • Quebec and BC carbon taxes • Varied, un co-ordinated. • Q: impact of lack of federal action?

14. IPCC 2007 policy summary

15. Options in Readings • Ch 7 in Hot Air- ‘What we Should Do’. • Subsidy and informational policies are weak and ineffective. Doesn’t address the real issue. • Jaccard and others argue for compulsory, not voluntary actions. More politically costly. • Jaccard and Rivers also omit any discussion of the potential benefits of bigger changes in societal direction, such as those needed to reduce the material and energy intensity of industrial production systems or to substantially increase urban densities, all of which are driven by larger concerns than climate change. • He argues against ‘government heavy-handedness’. • Other suggestions: • Phase in change (natural life-cycle). • Avoid policies that are ‘too costly’. • Focus on administrative feasibility and political acceptability. • GHG tax easy on consumption side, harder on emitting side, easier if just industrial emitters (who are over half). • Policies that focus on specific industries or regions are less likely to succeed. • Tax shift (rev. neutral)- transf. 2 AB.

16. Financial and Market Mechanisms • Not good at addressing market access, distributive impacts. • First, financial incentives/disincentives typically do not specify — and thereby provide less confidence in — environmental outcomes. Second, these policies will usually be less effective than regulations in overcoming non-financial barriers, such as lack of information.. • a “sequential” application of technologies — one that moves from the lowest-cost technology to the next-lowest cost technology and so on — is insufficient. Instead, a “concurrent” application of technologies will be required in order to avoid implausibly high levels of industrial growth in low-emissions technology industries. • Means• investing a portion of the revenues raised through carbon pricing in technologies that reduce emissions until they become competitive in the market (not rev. neutral) • • choosing policies that require an entire portfolio of technologies to be developed, such as a “feed-in tariff” policy for renewable energy • • establishing a mandatory carbon capture and storage target.

17. Discussion • In your group, assess the costs and benefits of carbon trading as a policy solution to the challenges climate change raises.

18. Discussion 2