Is there a conflict between reducing global income inequality and combating climate change? This seems like an odd question, given that these challenges have a lot in common. Raising the living standard of the poor for example, makes them resilient to climate impacts; less inequality can mean more political mobilization to establish climate policies; and changes in social norms away from material accumulation can reduce inequality and emissions. Academics have however been curious about the following phenomenon: In many countries, a dollar spent at higher income levels is less energy intensive than at lower income levels (known as “income elasticity of energy”). That is, rich people – although they consume much more in total – spend additional income on services or can afford energy-efficient goods, while the new middle class buy energy-intensive goods, like appliances and cars.
Many imagine China as a template for this type of fast growth. If globally significant, this effect would imply that growth that is more equitable would also be more emissions-intensive, and that we would have to pay particular attention to ensuring that climate policies reach the rising middle class in developing countries. While several studies have examined this phenomenon in specific countries, no one has examined its global significance. We set out to do that.
Energy intensity (MJ per $) lower in a high-growth, low inequality world (green line, Gini=0.29) compared to a low-growth, high inequality world (blue line, Gini=0.45). Gini reflects between-country inequality only.
Our analysis suggests that the energy-increasing effect of lowering inequality is more of a distraction than a concern. We compared scenarios of equitable and inequitable income growth, both within and between countries, assuming the most extreme manifestation of the income elasticity. Within any country, given the slow pace at which inequality typically evolves even with the most extreme known income elasticity and reduction in country inequality, greenhouse gas emissions would increase by less than 8% over a couple of decades. However, when one considers a more equitable distribution of growth between countries, global emissions growth may decrease when compared to growth that occurs in industrialized countries. This is because poorer countries have more potential for technological advancements that reduce the energy intensity of growth than richer countries do. That is, more income growth in poorer countries provides more opportunity for efficiency improvements that influence the emissions of very large populations. Furthermore, China is a poor model for poor countries at large, many of which have relatively low energy intensities, even today.
Climate stabilization at the level aspired to by the Paris Climate Agreement requires that we (i.e. the world) decarbonize to zero annual emissions around 2050, which means that even developing countries have to make aggressive strides towards integrating climate goals into development. Nevertheless, there is no sufficient basis for considering that equitable growth, and by implication the poor’s energy intensity, is part of the problem. To the contrary, the potential for co-benefits from equitable growth for climate change are enormous, but unfortunately under-explored, particularly in quantitative studies. Research should focus on quantifying the role of changing social norms – less consumerism, political mobilization, and other social changes that are typically associated with lower inequality – on reducing greenhouse gases.
Rao, ND, Min J. Less global inequality can improve climate outcomes. Wiley Interdisciplinary Reviews: Climate Change. 2018;e513. https://doi.org/10.1002/wcc.513
Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
Biogas–renewable fuel that can be produced from a variety of natural materials including manure, food waste, plant matter, and other organic matter–has the potential to solve a number of environmental challenges simultaneously: It can reduce the emissions of greenhouse gases such as methane (for example, from manure storage) and is the only mature type of renewable energy that can be directly used in electric power generation, heat generation, and transport sectors, and it leads to reduced impacts of pollution from waste disposal.
However, biogas is not without impacts of its own. The environmental benefit of using agricultural biogas in particular may be smaller than previously thought, because of the farming activities required for the production of suitable biogas feedstock (such as maize, wheat and triticale), which in turn generates local airborne pollution. Such factors are not adequately reflected in current energy measures.
In other words, existing policy instruments that have been adopted so far in Europe do not reflect the environmental impact associated with the production of certain biofuels because they do not account for other relevant environmental burdens generated along the supply chain.
This is especially the case for biogas, whose production contributes to several environmental burdens such as land use, traffic, and local emissions from the intensive use of fertilizers.
To overcome this issue, my colleagues and I have proposed the adoption of a monetization procedure through which the so-called external costs are incorporated in energy wholesale prices. This method, allows to allocate a cost to the environmental damage associated with emissions of a wide range of pollutants, which can be consequently incorporated in any economic optimization model.
In a new study, which I conducted with Sylvain Leduc and Florian Kraxner, we took a look at the biogas situation in my home country, Italy. We incorporated the total internal and external costs of different biogas utilization pathways in the BeWhere model—a model used for optimizing renewable energy systems–and compared with the performance of the current Italian energy mix.
We found out that, although each type of biogas leads to reduced CO2 emissions compared to fossil fuels, such environmental benefits are sharply reduced when we take other pollutant emissions into account. .
In particular, farming activities generate high non-carbon emissions such as nitrogen oxides (NOx), sulfur dioxide, and particles. Most of this pollution comes from chemical fertilizers and diesel combustion in farming activities–and these emissions corresponding to almost 6% of the energy content of the raw biogas produced.
The second cause of external costs is transportation of the biomass, which mainly produces local emissions of NOx. Local concerns about this issue, are a main source of opposition to new plants, and based on our study, these concerns appear reasonable.
Our results suggest that carbon emission mitigation alone is not always a satisfactory measure to evaluate the sustainability of biogas technologies in order to define energy policies. Other environmental burdens need to be considered when we discuss the environmental sustainability of energy production processes.
Patrizio P, Leduc S, Chinese D, & Kraxner F (2017). Internalizing the external costs of biogas supply chains in the Italian energy sector. Energy125: 85–96
This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
Why have Germany and Japan, two large, and in many respects similar developed democracies pursued different energy options? A recently published study examines why Germany has become the world’s leader in renewable energy while phasing out its nuclear power and Japan has deployed only a trivial amount of renewables while constructing a record number of nuclear reactors.
The widespread story is that Germany rejected nuclear power in a politically bold move after Fukushima and instead pursued ‘Energiewende’ prioritizing wind and solar energy to combat climate change. Leading scholars such as Amory Lovins described Japanese policymakers as manipulated by the nuclear lobby, clinging to their old ways, and unwilling to properly support renewable energy. The lesson to other countries is that public anti-nuclear sentiments and a capable democratic government is what it takes to turn to decentralized renewable energy.
This research shows that these stories are myths. As I and my coauthor wrote in a letter to the editor in Nature last year, Japan had ambitious renewable targets already before Fukushima and there is no evidence that these have been affected by its nuclear plans. The same holds for Germany: its targets for renewable energy were not affected by the change in its nuclear strategy following Fukushima’s disaster in 2011.
In fact, the differences between Germany and Japan started not in 2011 after Fukushima, but some 20 years earlier in the early 1990s when Japan’s electricity consumption was rapidly growing and it desperately needed to expand electricity generation to feed demand that could not be matched with very scarce domestic fossil fuels. Furthermore, Japan was developing ‘energy angst’ related not only to its high dependence on Middle Eastern oil and gas but also to potential competition with China’s with its rising appetite for energy. At the same time, Germany’s electricity consumption stagnated in the 1990s and its energy security improved following the end of the Cold War. Germany was also one of the world’s largest coal producers and could in principle supply all its domestic electricity from coal. As a result, in the 1990s, Japan was forced to build nuclear power plants, but Germany could easily do without them.
There was another important development in the early 1990s: wind power technology diffused to Germany from neighboring Denmark. This was triggered by an electricity feed-in-law of 1990s, which obliged German electric utilities to buy electricity from small producers at close-to-retail prices. The law, which aimed to benefit a small number of micro-hydro plant owners, unexpectedly led to almost a 100-fold rise in wind installations in Germany. Although still insignificant in terms of electricity, this development created a large and vocal lobby of owners and manufacturers of wind turbines. In the early 2000s, the wind sector provided less than one-tenth of nuclear electricity but had more jobs than in the nuclear sector. In contrast, Japan’s similar policies of buying wind energy from decentralized producers did not result in any considerable growth of wind power, because the Danish technologies prevalent in the early 1990s could not be as easily diffused to Japan.
By the turn of the century, the electricity sectors in Germany and Japan still looked largely similar, but the political dynamics could not be more different. In Germany, a huge politically-powerful coal sector was represented by Socio-Democratic Party and the so-called ‘red-green’ coalition was formed with the Green party, who represented the rapidly growing wind power sector. The stagnating nuclear industry, however, had not seen new domestic orders or construction for 15 years and large industrial players like Siemens had begun to diversify away from it. All this was in the context of a positive energy security outlook and declining electricity prices. In contrast, in Japan, the nuclear sector had vigorously grown over the last decade and was becoming globally dominant by acquiring significant manufacturing capacities. Nuclear power was the only plausible response to the energy angst and it lacked any credible political opponents: the domestic coal sector in Japan virtually did not exist (Germany had around 70,000 coal mining jobs, Japan – about 1,000) and wind had never taken off.
The results of these very different political dynamics were predictably different: the red-green coalition in Germany legislated nuclear phase-out in 2002 and unprecedented financial support for renewables in 2000, while retaining coal subsidies and triggering construction of new coal power plants. Japan continued to support solar energy in which it had been the global leader since the 1970s but it also adopted a plan for constructing many more nuclear reactors designed to substitute imported fuels. Fukushima, rather than highlighting differences actually made the energy trajectories of two countries more similar as both countries began to struggle to replace their aging nuclear capacities with new renewables.
How does this story relate to wider questions such as: why are some countries more successful in deploying renewables than others? The answer is not in ‘stronger political will’ and in the strength of climate change concerns, but in economy, geography, and the structure of energy systems. Political wins for renewables and the climate can also be the result of dubious political compromises such as the alliance with the coal lobby in Germany, which led to the rapid growth of renewables and demise of nuclear power. It may be particularly difficult for countries with fossil fuel resources to implement renewable energy policies if they lead to the contraction of domestic coal, gas or oil industries.
Shinichiro Fujimori, guest researcher in the IIASA Energy Program, discusses the implications of a recent paper with IIASA Science writer and Editor Daisy Brickhill.
The climate mitigation costs of the Paris Agreement are fairly distributed between countries, but they are not fair for future generations, a new IIASA study has found. This suggests that the relative differences between countries’ climate commitments can be kept the same, but to ensure equity for our descendants they must all be raised .
The Paris Agreement allows each country to set its own climate commitments (known as the Intended Nationally Determined Contributions, or INDCs), and while this autonomy encourages more states to enter into the agreement, it may result in some countries freeloading by not making their fair share of cuts. There is also a trade-off between the mitigation investments we make now, and how much we leave for our descendants to deal with. The study by Fujimori and colleagues examines the issue of equity from different angles.
How did you measure the equity of the climate commitments?
We designed four scenarios: there was the baseline, which has no climate policy, and therefore no emission constraints at all. Then there was a scenario with a carbon price that is the same all over the world, set high enough to put us on course to meet targets to keep warming well below 2°C by 2100. The third scenario allowed different countries to have different carbon prices, meaning that they followed their current INDCs until 2030, but at that point a global carbon price was again put in place to ensure that we reach 2°C targets by the end of the century. Finally, we created a scenario where all emissions reduction targets were 20% higher than the INDCs until 2030. Again, after that a global carbon price was set. For all of the scenarios we also varied what is known in economics as the “discount rate.”
What is a discount rate?
People tend to devalue the future. So, for example, given the choice of €100 now or €150 in five years, many people would choose the €100 now. This is known as a time preference. You can add to this an “inequality aversion.” This is the amount that a wealthy person is willing to reduce their consumption by in order to increase the amount a poor person can consume. Together they make the discount rate.
We used different values of discount rate to see what might happen if people cared a lot about future generations, or poorer countries, or if they did not.
And, are the INDCs fair?
We found that delaying emissions reductions will push the costs onto future generations. In all our scenarios, regardless of the discount rate, there was inequality between the generations. The best scenario for equity between current and future generations was the second scenario with high, globally uniform carbon taxes that start immediately.
The inequity between generations was not unexpected, but what was surprising was that under the Paris Agreement the equity between countries was good. The third scenario, which followed the INDCs until 2030, has much better equality between the regions until the global carbon price began in 2030. This is because low-income countries tended to set lower carbon prices, and more developed countries had higher carbon prices.
That means that the last scenario is the ideal. We can keep the relative differences between the INDCs the same but raise them all so that we can meet the targets. That would give us both inter-regional equity and inter-generation equity.
What about the costs of the impacts of climate change? The Paris Agreement mentioned the need for a mechanism to support the victims of climate-related loss and damage. Might that not create a completely different picture of equity?
That is not something we covered in the study, but it is very important. We need many more studies in that area. We need flood teams, agricultural teams, and others, all collaborating across disciplines. Very much how IIASA works, in fact. Fortunately, the model we constructed for this study can incorporate all of these aspects, as they become available, and translate them into a comprehensive economic assessment.
By Daisy Brickhill, IIASA science writer and editor.
Many of the options proposed for achieving a stable climate rely on ‘bioenergy with carbon capture and storage’ — burning plant matter for energy, capturing the carbon, and storing it underground. However, this technology has hardly been deployed on anything approaching the large scale. Is it a realistic tool for climate mitigation?
Limiting global warming to 2°C above pre-industrial times has long been a reference point for policymakers and researchers trying to reduce the chances of dangerous climate change. The 2015 Paris climate summit went even further, with countries agreeing to try and limit temperature rise to 1.5°C.
However, while there is a strong scientific consensus that we need to aggressively cut greenhouse gas emissions immediately, there is also growing evidence that we may not be able to achieve the necessary reductions in the time available. This means that we may need a way of removing CO2 already in the atmosphere — a process known as negative emissions.
Negative emissions can come in many forms: from simply planting more trees, to crushing rocks that naturally absorb CO2. One widely considered option is using plant matter as a fuel to produce energy, then capturing the CO2 that is emitted and storing it underground. This is known as bioenergy with carbon capture and storage (BECCS).
This latter technology is cited by research as being an important part of restricting warming to safe — or at least safer — levels since it contributes to both carbon sequestration and decarbonization of the energy system. In fact, more than half of the future scenarios that give at least a 66% chance of limiting warming to 2°C, which were developed for the Intergovernmental Panel on Climate Change (IPCC), feature BECCS.
However, the technology remains mostly untested on a large scale and there are doubts about its sustainability in terms of land and water use, and other potentially negative impacts on the environment. With so many IPCC scenarios including BECCS, information on whether it is at all a practical solution is desperately needed.
A recent IIASA study addresses deployment of BECCS in Indonesia, examining whether adapting existing coal-fired power stations so that they can burn a mix of coal and plant waste from agriculture (such as seed kernels or stems that are usually discarded), is more effective than building specific biomass-burning power stations.
Rice paddies in Indonesia. Plant waste from agriculture can be used in bioenergy with carbon capture and storage systems.
The team found that although both options saved the same amount of CO2, the combined stations were more efficient, producing more electricity for the amount of biomass burnt. “More efficiency means that burning biomass in adapted coal-fired power stations would be more economically viable,” says IIASA researcher Ping Yowargana, coauthor of the study. “It is also likely to be easier and cheaper to convert existing coal power stations than build new specific biomass-burning stations. With lower investments and existing infrastructure, policymakers and other stakeholders are more likely to embrace the idea.”
There are limitations: the study results indicate that under the current conditions it is not possible to burn any more than 30% biomass in a combined power station, for instance. There are also uncertainties surrounding whether it is possible to collect enough biomass on the scale needed. “We need to do further work on the logistic and financial feasibility of BECCS,” says Yowargana. “But these results are broadly general, and can be applied to other countries and situations, making them a valuable starting point.”
And while a complete conversion to a decarbonized energy system is needed in the long term, this work points the way to how BECCS might be deployed now to help prevent the damaging climate change we have sown for ourselves.
Reference: Hetland J, Yowargana P, Leduc S & Kraxner F (2016). Carbon-negative emissions: Systemic impacts of biomass conversion: A case study on CO2 capture and storage options. International Journal of Greenhouse Gas Control, 49. pp. 330-342.
Moreira, J. R., Romeiro, V., Fuss, S., Kraxner, F. and Pacca, S. A. (2016) BECCS potential in Brazil: Achieving negative emissions in ethanol and electricity production based on sugar cane bagasse and other residues. Applied Energy, 179. pp. 55-63. Item availability may be restricted.
Smith, P., Davis, S.J., Creutzig, F., Fuss, S., Rogelj, J., McCollum, D., Krey, V., Grubler, A., Jonas, M., Kraxner, F., Nakicenovic, N., Obersteiner, M. and Rogner, M. (2016) Biophysical and economic limits to negative CO2 emissions. Nature Climate Change, 6 (1). pp. 42-50.
Fuss, S., Canadell, J.G., Peters, G.P., Tavoni, M., Andrew, R.M., Ciais, P., Jackson, R.B., Jones, C.D., Kraxner, F., Nakicenovic, N., Le Quere, C., Raupach, M.R., Sharifi, A., Smith, P. and Yamagata, Y. (2014) Betting on negative emissions. Nature Climate Change, 4 (10). pp. 850-853.
Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
Interview with Naoko Ishii, CEO and Chairperson of the Global Environment Facility (GEF), an independent organization that provides grants for projects working towards sustainability. IIASA, the GEF, and the United Nations Industrial Development Organization (UNIDO) have recently partnered on a new project to explore integrated solutions for water, energy, and land.
Q What is sustainable development and why is it important? A As Brundtland put it, sustainable development meets the needs of the present without compromising the ability of future generations to meet their own needs.
If we do not achieve sustainable development, we will fail to provide even the barest essentials of life—food, water, and shelter—for the growing population. The extra two billion people that will inhabit the world in 2050 can only be accommodated if we are serious about sustainable development.
On a personal level I care about sustainable development because I care about the future, I care about young people, and I care about humanity. Achieving sustainable development is, in my opinion, the single most important issue we face today. Without it, all life on Earth is in jeopardy.
The Global Environment Facility (GEF) was created on the eve of the 1992 Earth Summit in Rio to assist in the protection of the global environment and promote sustainable development. The benefits of such an endeavor have only become clearer over time. It is no coincidence that in 2015 all nations of the world will adopt a set of sustainable development goals which place a strong emphasis on the “global commons,” and that in parallel we have a new global agreement on climate change within reach.
How do you see the world in 2050? What are your most optimistic and pessimistic visions? I am an optimistic person so I will say that, by 2050, every government, every business, and every individual will take the environment into consideration in all their actions. By 2050, we will all be caring for the Earth, taking responsibility for the use of our planet’s resources, and building economies which will leave no one without dignity or necessary subsistence. We will live within safe planetary boundaries. Pessimism is not an option for me.
How can science help the world achieve sustainable development? Science plays a critical role. We need it to monitor the state of our resources, the impacts of our activities, and the progress being made. Science can also help identify solutions. It can help encourage businesses to make smart decisions, for example, about saving money though energy efficiency, risk mitigation, and new revenue opportunities driven by innovation and new business models.
Sustainable development is a truly cross-cutting endeavor: it spans many sectors, from agriculture to economics, and transcends national boundaries. Science can play an important role by producing research that is integrated, cross-sectoral and international. In this way, synergies, co-benefits, and trade-offs can be explored in order to identify the smartest paths to achieving multiple sustainable development goals at the same time
How do you see the role of Global Environment Facility in implementing the Sustainable Development Goals? The GEF is uniquely placed to support the global commons—the planet’s finite environmental resources that provide the stable conditions required for a sustainable, prosperous future for all. Our new strategy—GEF2020—lays out an ambitious vision for the GEF, aimed at addressing the underlying drivers of environmental degradation and delivering integrated, holistic, solutions. We are building on more than 20 years of experience providing support to over 165 countries. By working with national governments, local communities, the private sector, civil society organizations and indigenous peoples, we help find and implement integrated solutions to global challenges.
What are the advantages of a cross-sectoral and cross-border approach to identifying paths to sustainable development? Many environmental challenges and threats to sustainable development do not respect borders. Moreover, they are often interdependent, or share common drivers. For example, biodiversity loss and climate change is partly driven by unsustainable forest management, which is in turn connected to production of globally traded commodities like palm oil or soy. Problems like this require an integrated, cross-cutting approach.
Given the importance of cross-sectoral interventions, at the GEF we will be implementing a program of integrated approach pilot projects. We believe that these will help countries and the global community in tackling underlying drivers of environmental degradation. I am also very excited about a research program we have recently launched in partnership with IIASA and the United Nations Industrial Development Organization, focusing on development and implementation of integrated solutions to tackle the water-food-energy nexus.
Note: This article gives the views of the interviewee, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.