What about the price of carbon?

The mysterious emissions trajectories implicit in the various draft COP15 agreements got me thinking about the economic implications of various paths. Suppose the following scenario, consistent with the Beijing draft (Copenhagen Accord) or recent KP draft actually happened:

  • deep 2020 cuts for the developed world
  • no binding commitments for the developing world
  • supported NAMAs in developing countries don’t count as offsets against developed country commitments (i.e. developed commitments are met domestically)
  • border carbon adjustments (tariffs on the greenhouse gases embodied in trade goods) are illegal
  • ongoing globalization

In that case, price of carbon would be very high in the developed world, and very low in the developing world. That creates intense pressure for leakage. Emissions-intensive industries would simply relocate to developing countries. Total emissions wouldn’t necessarily go down, except to the extent that relocated capital was newer and cleaner, and might even go up due to greater transport distance and less stringent environmental regulation.

Another consequence is that investors in the developing world, including governments investing in infrastructure, would proceed to build GHG-intensive capital that would just have to be unbuilt in a decade or two. That’s not development; it’s unsustainable lock-in to a dead-end economic, technical, and lifestyle trajectory.

Probably the first thing to happen would be for workers (aka voters) in the developed world to freak out at the resulting job losses, causing the whole agreement to unravel. So, I think you can scratch this kind of arrangement off the list of possible or attractive agreements. If we want to achieve the underlying development goals that motivate people to ask for such things, we need to find a different path.

You can't fix emissions inequity with more emissions

A lot of the draft agreements floating around reference a principle of equity in cumulative emissions budgets. For example, the latest AWG-LCA draft,

A long-term aspirational and ambitious global goal for emission reductions, as part of the shared vision for long-term cooperative action, should be based on the best available scientific knowledge and supported by medium-term goals for emission reductions, taking into account historical responsibilities and an equitable share in the atmospheric space;

That’s a nice sentiment, but the goals expressed here are not compatible. If you take “aspirational and ambitious” to mean 55oppm – much less stringent then a 1.5 or 2C target – we’re already halfway or more through civilization’s cumulative emissions budget. Most of the historic emissions occurred in the 20th century. The rest will happen this century. The problem is, there are a lot more people around this century than last. Therefore, this century’s remaining emissions budget just isn’t big enough to make up for historic inequity in emissions, even if you allocate it all to the developing world.

For example, here’s a scenario in which the developed world stops emitting almost immediately – essentially abandoning its GHG-intensive capital stock – while the developing world pursues a trajectory consistent with a global 50% cut by 2050. Per capita emissions convergence and reversal happens right away:

per capita emissions

Continue reading “You can't fix emissions inequity with more emissions”

Random COP15 roundup

NGOs are mad that registered participants are being excluded, so they stage a walkout. Isn’t that like going on hunger strike to protest a food shortage?

For the record, I’m among the excluded. I don’t feel so bad now that friends tell me that I’m in good company – a former Danish prime minister didn’t make it in today, and even Al Gore had to wait an hour.

A colleague asked the leader of a Very Big Country delegation what he could do for him. The answer, “just pray for us.”

Bill McKibben stopped by to chat. He pointed out the current low price tag on deforestation proposals – $25 billion per year. A Big Mac, Coke and fries for everyone in the developing world. Yay!

The AWG-KP draft

I’ve added the Dec. 16 Kyoto Protocol working group draft to my summary table.

There’s not much to report with respect to the global outcome. Most of the detail is focused on Annex I (developed) country commitments. There are so many options and brackets in the text that it’s hard to draw any concrete conclusions about the implied emissions trajectory.

There’s possibly an interesting disconnect around characterization of the second round of targets. Currently there are a number of options included in bracketed text. First, the endpoint could be either 2017 or 2020. Second, various options suggest a range of cuts between 15% and 49% below 1990. This range corresponds roughly with the range typically cited as providing a decent chance of hitting a 2C target (see AR4 WG3 Ch. 13 box 13.7, pg. 776, for example).

If you think back to the first Kyoto agreement, countries committed to small cuts relative to 1990 for a commitment period from 2008 to 2012. For the EU, with an 8% cut, that meant averaging 92% of 1990 emissions over the commitment period. If you imagine that emissions fall along a linear path from 1990, that means that emissions at the midpoint (2010) would be 92% of 1990, and emissions would be a little higher prior to that, and lower after. Because the slope from 1990 through 2012 is shallow, a viable trajectory would include a 7% cut in 2008 and 9% in 2012. No big deal.

However, for the next commitment period, the slope is a very big deal. The deepest cut in the AWG-KP draft is 49% for the developed world. I suspect that number is anchored on upper end of the AR4 2C range (25-40%), moved up a bit. 49% still sounds plausible. But there’s a problem: to achieve a 49% average over 2013-2020, starting from a 9% cut in 2012, you’d have to do one of two things: reduce emissions an additional 37% overnight, then keep them there (basically impossible), or reduce emissions by 13 percentage points per year, arriving at a cut of 76% in 2017. That’s a year-on-year reduction rate of 15 to 35% per year. That’s pretty tough going, given that, even if you never build another bit of carbon-emitting capital, natural turnover takes you down at 2 to 5% per year.

Required trajectory of 2nd Kyoto commitment

I’m all for strong targets, but abandoning capital at 10% per year is going to be a tough sell. It’s not clear to me that this is intentional. I think it’s quite possible that misperception of the dynamics of a target accumulated over an interval leads to false conflict, as desire to achieve a point goal (e.g., -40% in 2020) is confused with a much more stringent goal over a long interval.

COP15 weirdness

I must be feeling punchy from waiting in line for hours in hope of picking up my COP15 credentials. When they started serving coffee, I knew all was lost, and bailed out – realizing that the coffee was just a ploy to get people with small bladders out of the line. That turned out to be a good decision, as the price of entry today was apparently a 7hr wait. The Danish police serve a darn good cup of joe, though.

The long wait in the chilly morning turned up all kinds of oddities, from the Copenhagen Code of Ethics anti-prostitution-at-COP15 postcards to Larouchite ramblings about the coming genocide, to mitigate by eliminating 3 billion people. The latter screed cites Dennis Meadows,

And what wisdom does Meadows offer us today? In an interview with the German magazine Spiegel, he said, “We have to learn to live a life that allows for fulfillment and development with the CO2 emissions of Afghanistan.” This begs the question: how much CO2 do opium pipes emit, Mr. Meadows?

I thought everyone knew that opium pipes are carbon neutral, because the poppies take up as much carbon as their combustion emits. At least they have a sense of irony, when they write,

Indeed, it is only by understanding that it is against the background of the hopelessly bankrupt financial system, that one can explain how all sorts of strange creatures have the audacity to come crawling out of the woodwork to express their absurd ideas.

Copenhagen Sex Postcard

COP15 Mad Libs

The latest draft says targets are “to be elaborated,” so there’s nothing for us modeling types to chew on. To commemorate the non-agreement, populate this:

The Conference of the ___________ (plural noun)

The Parties underline that ________ (noun) is one of the greatest challenges of our time and commit to a _______ (adjective) response through immediate ambitious _______ (noun) and strengthened international cooperation with a view to limit global average temperature rise to a maximum of ______ (number) degrees above ________ (adjective) levels. The Parties are convinced of the need to ________ (verb) climate change bearing in mind that social and economic development and ______ (noun) eradication are the _________ (adjective) priorities in ________ (adjective) countries. The Parties note that the ______ (adjective) share of historical global emissions of ________ (noun) originates in developed countries, and that _______ (plural noun) in many developing countries are still relatively low. The Parties recognize the urgency of addressing the need for ______ (noun) on adaptation to climate change. They are _________ (adverb) convinced that moving to a _________ (adjective) economy is an opportunity to promote continued economic growth and _________ (adjective) development in all _______ (plural noun) recognizing that ________ (noun) equality is essential in achieving sustainable _________ (noun).

In this regard, the ______ (plural noun):

– Support the goal of a _____ (noun) of global emissions as soon as possible, but no later than ______ (number over 2010), acknowledging that ______ (adjective) countries collectively have ______ (verb, past tense) and that the timeframe for peaking will be longer in ________ (adjective) countries,

– _______ (verb) the goal of a reduction of _______ (noun) in _____ (number over 2020) by at least ______ (fraction).

The _______ (possessive noun) contributions towards the goal should take into account ________ (adjective) responsibility and respective capabilities and a long term convergence of _____ (noun).

Resist the temptation to use only expletives. Thanks to Beth for the idea. I’ll paypal beer money to the best version in comments.

Will the real Copenhagen agreement please stand up?

All the Copenhagen drafts circulating reminded me of this October video, in which Lord Monckton says he’s already read the treaty that most countries are going to sign. I’m actually relieved that all the frantic drafts and pointed words are just a show for the media, and that Obama and Hu Jintao really see eye to eye. Todd Stern and Su Wei are such good actors! Just think, in a week, my patrimony checks from the global climate conspiracy will start rolling in! Signing off for a bit to polish my jackboots…

Stiefel_1914 jackboots

The AWG-LCA draft agreement

Like the AOSIS draft, the LTCA draft is a bit coy about developing country actions, and there are a number of unsettled language variations, indicated by brackets. It sets a global goal of 1.5C to 2C, and emissions cuts of 50 to 95 percent from 1990 levels by 2050. Developed countries commit to between 75 and more than 95 percent by 2050, with interim targets of 25 to 45 percent below 1990 by 2020. The developing countries are not explicitly subject to targets, but the combination of supported and autonomous NAMAs is “aimed at achieving a substantial deviation in emissions [in the order of 15-30 percent by 2020] relative to those emissions that would occur in the absence of enhanced mitigation.” The BAU trajectory against which that might be judged is unspecified.

The bracketed options in the text create many possible permutations of the agreement. One is particularly illuminating: the least stringent global target (peak in 2020, 50% below 1990 in 2050) combined with the most stringent developed target (peak in 2011, 45% below 1990 in 2020, 95% below 1990 in 2050). That yields maximum possible emissions in the developing world, given the global and developed budgets.

In that scenario, developing emissions could look like the following:

AWG-LCA developing emissions

Emissions in the developing countries still must peak before 2030. Note that, as in my AOSIS experiment, the potential emissions budget for developing countries exceeds business-as-usual; if BAU emissions don’t actually rise faster than anticipated, those emissions might be reallocated to delay the peak in emissions a bit, but not more than a few years.

Interestingly, this scenario results in hyper-convergence, with developed emissions per capita falling well below developing emissions per capita.AWGLCApercap

It’s unlikely that this is a physically or politically realizable situation, given that developed countries would have to reduce emissions far faster than the natural rate of capital turnover. The rapid decline would not benefit developing countries either, because buildings and infrastructure cannot be moved elsewhere. If developed countries make less aggressive cuts, to about -30% in 2020 and -85% in 2050, per capita emissions converge between 2030 and 2040. However, in that case, developing country emissions have to peak earlier and fall faster.

The only way to delay the peak in developing country emissions significantly is to delay the global peak. However, meeting the same global 2050 target with a later start requires faster declines in emissions, which quickly become impractical unless you assume some kind of technical miracle (not a robust strategy). Therefore, the only way for developing countries to avoid a peak in emissions in the next decade or two is to abandon any pretense of preserving a reasonable probability of meeting 2C or similar targets. That seems to be what some of the big emerging emitters are implicitly arguing for, but is it what they really want, or in their best interest?

Afterthought: The big challenge is that the global and developed country targets are explicit, while the developing country trajectory those necessitate is not. The draft recognizes means for reducing developing country emissions (supported and autonomous NAMAs), but there’s no coordinating mechanism that ensures the outcome adds up to the global goal.