10 steps to removing carbon from the global economy

By Nebojsa Nakicenovic, Deputy Director General, International Institute for Applied Systems Analysis (IIASA), Austria (Originally published on the World Economic Forum Agenda Blog.)

Nebojsa Nakicenovic

Nebojsa Nakicenovic

Goal 7 of the Sustainable Development Goals is ambitious: Ensure access to affordable, reliable, sustainable and modern energy for all. This must be accomplished without compromising Goal 13: climate. This is achievable.

In spite of ups-and-downs and outright shocks in the global economy, some quite recent, the economic success stories of the industrialized countries are role models for the countries that are still developing. This puts the entire global community in the dichotomous position of needing to fire up the engine of growth, without producing the greenhouse gases it has been emitting since the beginning of the Industrial Revolution. What is the answer?

Very few questions in the complex area of energy and climate change can have a simplistic answer, but I am going to attempt one here: decarbonization, namely, drastic reduction of carbon dioxide and other greenhouse gas emissions per unit of economic activity.

Back in 1993, I wrote this:

“The possibility of less carbon-intensive and even carbon-free energy as major sources of energy during the next century is consistent with the long-term dynamic transformation and structural change of the energy system.”

My view in 2015 is the same; however, the scientific community 22 years later has a much better understanding of “the decarbonization challenge” and how it can be addressed. I will sketch out a 10-step approach to the removal of carbon from the global economy, but first I’d like to paint in a bit of the background.

Carbon dioxide is the main greenhouse gas and contributor to climate change. The largest source is our use of fossil fuels to drive development. Carbon dioxide emissions have increased exponentially since 1850 at about 2% per year, while decarbonization of the global economy is only around 0.3% per year.

The 2012 Global Energy Assessment, in which IIASA played a leading role, puts the current decarbonization rate at approximately six times too low to offset the increase in global energy use of about 2% per year. To meet the goal of the 2009 climate agreement (the Copenhagen Accord), namely, “the scientific view that the increase in global temperature should be below 2 degrees Celsius” to prevent dangerous anthropogenic interference with the climate system, global net emissions of carbon dioxide and other greenhouse gases will need to approach zero by the second half of this century, implying deep, deep decarbonization rates.

working oil pumps © Kokhanchikov | Dollar Photo Club

“Carbon dioxide is the main greenhouse gas and contributor to climate change. The largest source is our use of fossil fuels to drive development.” © Kokhanchikov | Dollar Photo Club

But we need deep decarbonization while energy needs are increasing to meet the demand of the developing world, including the three billion without access today to sustainable energy. All scenarios in the academic literature that lead to further economic development in the world, universal access to sustainable energy, and the stabilization of climate change to less than 2 degrees Celsius, anticipate deep and urgent decarbonization. Here’s my 10-point plan for doing that.

  1. Change attitudes
    Attitudes to energy use are based on many factors, from cultural norms to overall infrastructure design. We need much greater political will to affect a change in attitudes: it is critical that policy interventions should communicate to citizens the ethical notion of improved well-being and health now and for future generations of a zero-carbon economy. .
  1. Transform governance
    The transformation needed this century is more fundamental than previous transformations, like the replacement of coal by oil, because of the significantly shorter time needed to achieve it. Thus, government policies are essential, and are needed particularly in changing buildings codes, fuel efficiency standards for transportation, mandates for the introduction of renewables, and carbon pricing.
  1. Improve energy efficiency
    More efficient provision of energy services, or doing more with less, and radical improvements in energy efficiency, especially in end use, will reduce the amount of primary energy required and represents a cost-effective, near-term option for reducing carbon dioxide emissions, as well as having multiple benefits in different areas of life.
  1. Ramp up renewable use
    We can show that the share of renewable non-fossil energy from solar, wind, rain, tides, waves, and geothermal sources in global primary energy could increase from the current 17% to between 30% and 75%. In some regions it could exceed 90% by 2050, provided that public attitudes change and efficiency increases.
  1. Reduce global energy intensity
    The energy intensity in the industrial sector in different countries is steadily declining due to improvements in energy efficiency and a change in the structure of the industrial output. Far greater reductions are feasible by combining these improvements with adoption of the best-achievable technology.
  1. Use known technologies
    Carbon dioxide capture and storage (CCS), now being piloted, is a pathway that leads to decarbonization with continued use of fossil energy. It requires: reducing costs, supporting scale-up, assuring carbon storage integrity and environmental capability, and securing approval of storage sites. Nuclear energy could make a significant contribution in some parts of the world, or it could be phased out as, for instance, in Germany.
  1. Improve buildings
    Retrofitting buildings can reduce heating and cooling energy requirements by 50–90%; new buildings can be designed and built using close to zero energy for heating and cooling. Passive energy houses and those that produce energy onsite are another great opportunity to achieve vigorous decarbonization. In conjunction with compatible lifestyles oriented toward rational energy use, efficient buildings are an important decarbonization option.
  1. Cut transport carbon
    A major transformation of transportation is possible over the next 30–40 years and will require improving vehicle designs, infrastructure, fuels and behavior. Electrically powered transportation reduces final energy use by more than a factor of three over gasoline-powered vehicles. A shift toward collective mobility is an essential option. This also implies behavioral changes and new business models like car-sharing, and self-driving cars to replace individual mobility.
  1. Clean industrial processes
    Overall, global industry efficiency is only 30%. Improved energy efficiency in industry results in significant energy productivity gains and, in turn, improved productivity boosts employment and corporate competitiveness. A shift toward low to zero emission energy sources in industry is another important and much-needed change. For example, with an aggressive renewables strategy, near-zero growth in GHG emissions in the industrial sector would be possible. Finally, decarbonization would also involve changes of industrial processes, for example, from high to low temperatures.
  1. Stranded assets and ‘derisking’ renewables.
    The flow of investment needs to be changed away from fossil fuels and toward efficiency, renewables, decarbonization of fossil energy sources, and especially efficient end-use in buildings, transport, and industry. Sustainable energy futures require relatively high up-front investments with the benefit of low long-term costs. They are attractive in the long run, but the up-front investments need derisking and other forms of support, such as feed-in tariffs.

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.

William Nordhaus: A new model for climate treaties

“We have to recognize that international approaches to climate change have basically failed. They are not going anywhere, maybe even backwards,” said economist William Nordhaus at a lecture for IIASA staff and young scientists on 23 June. The reason for this failure, he argued, is that international agreements have so far failed to deal with the problem of free riders.

The Kyoto Protocol, for instance, failed as countries dropped out one by one, as soon as mitigation started to become costly. Many countries never even ratified the agreement. Nordhaus explained, “There were no penalties for dropping out.”

Norhaus first introduced the concept at the IIASA 40th Anniversary Conference in 2012.

Norhaus first introduced the concept of climate clubs at the IIASA 40th Anniversary Conference in 2012.

As the next round of climate talks approach this winter and next in Paris, many researchers say it is time for a new model for international climate change treaties. One new idea, which Nordhaus first proposed at the IIASA 40th Anniversary Conference in 2012, is the concept of “climate clubs.”

Nordhaus said, “Think of the treaty as a club. It’s a voluntary agreement, where members get certain benefits, for a certain cost.” A climate club would work like a free-trade union, such as the EU. It would encourage participation by penalizing non-participants, allowing members of the “climate club” to charge tariffs on all imports of non-participating nations. In his lecture on Monday, Nordhaus expanded on the concept he introduced in 2012, presenting the results of modeling work to determine the tariff rates and carbon prices that would be needed in such an agreement, and how participation would look.

Nordhaus found that more countries were likely to participate when carbon prices were lower. At a carbon price of 25 or 50 dollars, a majority of world regions would participate in the club, while at higher carbon prices of 75 to 100 dollars per ton of carbon dioxide, the highest participation rate would be only about half of that.

From left: William Nordhaus, Nebojsa Nakicenovic, and Joanne Bayer

At IIASA on Monday. From left: William Nordhaus, IIASA Deputy Director General Nebojsa Nakicenovic, and IIASA Risk Policy and Vulnerability Program Director Joanne Bayer

The high carbon price, Nordhaus explained, would make the cost of participating much higher than the costs of tariffs for non-participants. However, with a lower carbon price, even low penalty tariffs of 3 to 4% could be enough to encourage participation. The idea of tariffs is simpler than previous suggestions of trade penalties based on the carbon emissions impact of specific goods—which in practice are difficult to define, and, as Nordhaus said, “not a big enough stick to induce participation.”

Like any trade agreement, though, Nordhaus’ climate club also means some win and some lose. When he examines the benefits on a regional level, the US, EU, and India appear to gain the most benefits, while Russia and China gain the least. What would it take to get such an agreement off the ground? Nordhaus said that a few key regions would be enough—for example, the EU, the USA, and China.

Watch Nordhaus’ 2012 Lecture at the IIASA Conference

William Nordhaus is Sterling Professor of Economics at Yale University, New Haven, Connecticut, USA. He has a B.A. from Yale University (1963) and a Ph.D. in Economics from MIT (1967). More>>

The future of social change

By Anne Goujon, IIASA World Population Program and Vienna Institute of Demography

How will societies develop in the future? And what environmental, economic, and social factors will influence these changes? Can these problems be analyzed in a scientific way? And if so, what tools should we use? On 13 June, I took part in a workshop for a project aimed at answering these questions.

This was the second workshop organized by the Forward Looking Analysis of Grand Societal Challenges and Innovative Policies (FLAGSHIP) project, supported by the European Commission under FP7 and aiming at developing new policies to help solve major social problems.

The workshop took place in Nanterre, France.

The workshop took place in Nanterre, France. Photo Credit: Bladsurb via Flickr

I participated in a round table where we discussed how to find tools for forward-looking analysis and how to develop and integrate them to analyze societal change. This implies the integration of different models (economic, territorial, environmental), which can be very challenging. It can be difficult to avoid overlaps between models, and also to account for possible feedback effects between different factors. We discussed how to choose between two overlapping outputs such as two different GDP projections produced by environmental and economic models. Shall we try to validate the models historically by checking which model is best able to reconstruct the past? A nice idea, but most researchers agreed it would be too time and data-intensive to be practical. Another alternative, much less rigorous but easier to implement, would be to compare the results of the two models and decide which one is the best among the FLAGSHIP team. But according to which criteria? The last alternative would be to decide upfront which model should provide which outcome. It is almost a philosophical decision to be made as none is right or wrong.

Innovation seems to be at the core of all models for the future of Europe, encapsulating more than Information and Communication Technologies and Research and Development, but also incorporating other components such organizational capital – the share of a firm at management level. At the moment, FLAGSHIP is envisaging two storylines for the future—namely socio-ecological transition and global growth—which are actually not very far from some of the Shared Socioeconomic Pathway (SSP) scenarios developed by IIASA and others for the 5th assessment of the IPCC . Another IIASA researcher, Samir K.C. presented these scenarios at the meeting as an invited expert.

In a 2011 Science article, IIASA researchers Wolfgang Lutz and Samir KC showed the importance of population heterogeneity, specifically related to age, sex, and level of education, whenever population is an important driver of change. At the workshop, KC talked about the steps involved in the process of developing global demographic and human capital scenarios for the SSPs, with an emphasis on the importance of dialogue, discussion, and interactive iteration between the demographers and the user community in shaping the quality of the product. He recommended more consultation between the demographers and other experts in the FLAGSHIP project to produce consistent and meaningful demographic narratives. He also argued that existing scenarios such as SSPs should be explored and might be useful with some alterations.

Since the project looks at the next 50 years, rather short-term from a demographic point of view, population will possibly enter the whole model with just one scenario.

More information
FLAGSHIP Project 2nd Workshop
EU FLAGSHIP Project Web site

Towards a climate risk management approach for adaptation

By Reinhard Mechler, IIASA Risk, Policy, and Vulnerability Program

On March 25, member countries of the Intergovernmental Panel on Climate Change (IPCC) started discussing the key findings of the second volume of the Fifth Assessment Report (AR5) in Yokohama, Japan. The report focuses on climate-related impacts, risks and adaptation. Once approved by the 150+ governments present, together with IPCC’s other two parts of the report on physical climate science and mitigating greenhouse gases, it will constitute the scientific backbone for informing national and international climate policy over the coming years.

Flooded marketplace in Jakarta. Credit: Charles Wiriawan/Flickr (Creative Commons License)

Flooded marketplace in Jakarta. Credit: Charles Wiriawan/Flickr (Creative Commons License)

A key aspect in climate adaptation is dealing with extreme events including natural disasters. It has become clear that extreme event risk constitutes a large part of the adaptation problem, particularly for developing countries and communities.

Despite this growing awareness, the international adaptation policy process is moving forward only slowly. Specifically, there is need for concrete advice for the Loss and Damage Mechanism, the main vehicle under the Climate Convention for dealing with climate-related impacts, which was agreed in Warsaw at the last Conference of the Parties in late 2013

In our commentary, published today in Nature Climate Change with colleagues from LSE, IVM and Deltares, we suggest that better understanding climate-related disaster risk and risk management can inform effective action on climate adaptation and point a way forward for policy and practice.

A key to moving forward is an actionable concept of risk. This involves identifying efficient and acceptable interventions based on recurrency of hazards—a concept known as risk layering. For example, for flood risk, this could mean identifying physical flood protection to deal with more frequent events, considering risk financing for infrequent disasters as well as relying on public and international compensation for extreme catastrophes. Risk layering overall points towards considering risk comprehensively as determined by climatic and non-climatic factors as well as considering portfolios of options that manage risks today and in the future.

The concept of risk layering underlies many areas of risk policy and management in agriculture, finance and insurance. It has been applied for disaster risks, mostly for insurance options, but not informed thinking on comprehensive risk management portfolios. Such broad understanding of risk management can also be helpful in identifying risks that are  beyond adaptation–meriting international support, such as from the Green Climate Fund.

Climate risk management has now moved beyond theory. As one example, the megacity of Jakarta currently is setting up a multi-billion dollar program to manage increasing risk from sea level rise with large levees. This effort is integrated with a concern for managing flood risk and land subsidence, which are shaped by non-climatic factors, such as unplanned urbanization. The effort, therefore, involves options to implement acceptable building and zoning regulations for reducing exposure and vulnerability of houses and infrastructure to flooding.

Many policy-and implementation-specific questions remain. Over the coming months, IIASA researchers and our network will take the agenda on climate risk management forward with a focus on informing policy as well as providing actionable information on the ground.


Reinhard Mechler, Laurens M. Bouwer, Joanne Linnerooth-Bayer, Stefan Hochrainer-Stigler, Jeroen C. J. H. Aerts, Swenja Surminski & Keith Williges. 2014.  Managing unnatural disaster risk from climate extremes. Nature Climate Change. March 26, 2014. http://www.nature.com/nclimate/journal/v4/n4/full/nclimate2137.html

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.

What does the IPCC report mean for climate policy?

By Anthony Patt, ETH Zurich and IIASA (From ETH-Klimablog)

SONY DSCThe first of three working group reports of the Intergovernmental Panel on Climate Change (IPCC) was made public last Friday. Previous reports served as guidepost for climate policy development. And yet some policies were clearly more effective than others.

Over the next several months, the IPCC will release a series of three volumes, one from each of its three working groups, together constituting its Fifth Assessment Report (AR5). The Working Group  (WG) 1 report, on the science of climate change, was just published, while reports from WGs 2 and 3, covering climate impacts and adaptation, and the challenge of reducing or stopping climate change, respectively, appear in March and April of 2014.

Established by the United Nations in 1988, the role of the IPCC is to assess the state of the science, communicating it in a manner that is useful to policy-makers. Three of the previous four assessment reports have come at critical times in climate policy development. The first two supported negotiations of the current global treaty and its first major revision. The Nobel Peace Prize winning Fourth Assessment Report (AR4) was released in 2007, intended to guide the negotiations to the successor to Kyoto.

The AR4 delivered a convincing two part message: that to avoid dangerous climate change the world must embark on a pathway completely eliminating greenhouse gas emissions from industry and land use change by the second half of this century, and that such a pathway is both technically and economically feasible. Many expected this message to lead to a successful negotiation process to be completed in Copenhagen in 2009.

International climate negotiations have made little progress.

International climate negotiations have made little progress, but the IPCC still has value, argues Patt.

But negotiators failed to reach an agreement in Copenhagen, and have made remarkably little progress in the four years since. Moreover, both the recently published AR5 WG1 report and early drafts of the WG2 report on climate impacts and adaptation suggest that their findings will strengthen those from AR4, but will not add anything dramatically new. Some say that the IPCC is no longer of any value. I disagree, for two reasons.

First, the most ambitious policy developments are now happening at the national level, with countries like Germany, Switzerland, and even the United States planning exactly the kind of transition away from fossil fuels and high emissions pathways that the AR4 suggested was both necessary and possible.1 There is reason to believe that the actions of this smaller number of countries will deliver the technological progress to make a global transition possible. Without the AR4, it is easy to imagine such countries having behaved differently, while the AR5 WGs 1 and 2 reports ought to provide added justification.

Second, deep differences of opinion have emerged concerning the best policies to achieve national decarbonization goals. Ten years ago, almost all analysts were convinced that carbon markets, i.e. trading in CO2 emissions certificates, represented the ideal policy instrument. But these have worked poorly, while portfolios of other instruments, including subsidies and regulations, have exceeded expectations. Researchers have studied these outcomes.e.g. 2 They have found, for example, that the more successful policy instruments are those that work to minimize the risks that investors in new technologies face.

The AR5 makes clear that an energy system transition remains necessary, and indeed now appears even more urgent than it did a few years ago. It is now possible for the IPCC, in its WG3 report, to provide a critical appraisal of alternative strategies. This is badly needed.

This post was originally published on the ETH Zurich Klimablog (in German).

1.         Lilliestam, J. et al. An alternative to a global climate deal may be unfolding before our eyes. Clim. Dev. 4, 1–4 (2012).
2.         Peters, M., Schneider, M., Griesshaber, T. & Hoffmann, V. H. The impact of technology-push and demand-pull policies on technical change – Does the locus of policies matter? Res. Policy 41, 1296–1308 (2012).

About the author
Anthony Patt is Professor at ETH Zurich, and a Guest Research Scholar in IIASA’s Program on Risk, Policy and Vulnerability, where he serves as head of the  Decisions and Governance Research Group. His research is on the effectiveness of policies at addressing risks and uncertainties in the area of climate change, considering both the restructuring of energy systems and adapting to climate impacts and vulnerabilities. Read more>>

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.