achieving better outcomes achieving better outcomes and some - - PDF document

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The role of science and modelling in

achieving better outcomes achieving better outcomes

and some thoughts on wellbeing and sustainability

Professor Steve Hatfield-Dodds Presentation to ESCAP Study Tour, Canberra, 11 September 2013

CSIRO INTEGRATION

Can humanity transition?

“We are now in the middle of a long process of transition in the nature of the image which man has

• f himself and his environment …”

Kenneth Boulding (1966) The economics of the Coming Spaceship Earth

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Some big questions

What needs to change?

What are the links between economic growth, wellbeing, and environmental pressure?

What blocks or supports desirable policy change?

What is the role of science and modelling ?

Case study: Using climate economics to inform policy

What needs to change?

What are the policy levers? Do we need to choose between economic growth and sustainability? Do we need a change of values?

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300 400 500 600 700 800

1990 2000 2010 2020

historical emisisons baseline national emissions, 2011 policy settings, no carbon price

+22%

• 5%
• 15%
• 25%

emisisons excluding land use change reference case emissions, 1990 policy settings

Australian Emissions and Abatement to 2020

The (climate) transition challenge

Source: redrawn from Australian Government (2011) Strong Growth Low Pollution, and Department of Climate Change and Energy Efficiency (DCCEE), 2011, Australia’s emissions projections 2010 300 400 500 600 700 800

• 149

Mt

• 205

Mt

• 261

Mt 46 Mt 2011-2020 63 Mt 1995-2011

Additional Abatement Challenge

in 2020 (MtCO2e)

Abatement from existing policies

(MtCO2e)

What are the opportunities?

A stylized abatement cost curve

GHG reduction, MtCO2e Percent of total opportunity Average cost, A$/tCO2e Industry Power Transport Buildings Forestry Agriculture

Net savings Moderate cost Higher cost 100 50 150 200 250 Emissions reduction potential MtCO2e per year Cost to society A$/tCO2e 100 50

• 150
• 200
• 50

150

• 100

energy and resource use efficiency land use, agriculture

(medium to long term)

energy supply

(fuel switching and renewable energy)

transport planning, urban design

(long term)

Source: adapted from ClimateWorks Australia 2010

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What are the policy levers?

GHG reduction, MtCO2e Percent of total opportunity Average cost, A$/tCO2e Industry Power Transport Buildings Forestry Agriculture

Net savings Moderate cost Higher cost 100 50 150 200 250 Emissions reduction potential MtCO2e per year Cost to society A$/tCO2e 100 50

• 150
• 200
• 50

150

• 100

Source: adapted from ClimateWorks Australia 2010

reward carbon

• ffsets (land)

coordination and planning address split incentives network governance information and reporting appliance standards accreditation, frameworks for voluntary action agricultural extension price pollution (energy, industry) inform and enable incentives, regulation coordinate

What are the impacts?

20 40 60 80 100 20 40 60 80 100 2010 2020 2030 2040 2050 Reference CPRS -5 CPRS -15 Garnaut -10 Garnaut -25 '000, $2005 '000, $2005 200 400 600 800 1,000 1,200 200 400 600 800 1,000 1,200 2010 2020 2030 2040 2050

Reference CPRS -5 CPRS -15 Garnaut -10 Garnaut -25 Mt CO2-e Mt CO2-e

National emissions fall ... while national income grows

Source: Australian Government (2008) ALPF, Charts 6.1 and 6.4; Summary Table 3.2

Emissions allowances fall 60-90% from 2000 levels by 2050

Domestic emissions typically fall slowly to around 2030, and then accelerate, with trend rate depending on the carbon price

Average income grows around 1.3% per annum in most scenarios, compared to 1.4% pa in the reference case

Real GNP per capita rises from $50,400 in 2008 to at least $54,700 in 2020 and $78,000 in 2050

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Decoupling growth and pressure

Is it possible? Would it be sufficient?

50 100 150 200 2005 2020 2035 2050

follower

(emissions reduction policy)

BAU

(reference case)

Population (P)

50 100 150 200 2005 2020 2035 2050

follower

(emissions reduction policy)

BAU

(reference case)

Affluence (A)

(GDP.pc)

50 100 150 200 2005 2020 2035 2050

Tc (CO2e),

follower

Tc (CO2e), BAU Te (energy), BAU Te (energy),

follower

Technology: the intensity of economic activity

Te (energy per unit of GDP) Tc (CO2e emissions per unit of energy) ∆ Tc CO2e

intensity of energy

∆ Te energy

intensity of GDP 50 100 150 200 2005 2020 2035 2050

CO2e,

follower

CO2e,

BAU

Energy,

BAU

Energy,

follower

Energy (primary energy production) CO2e emissions

(before use of international offsets)

∆ Energy

across scenarios

∆ CO2e

across secnarios

= x x

P A T

‘Impact’ (or ‘Pressure’)

Energy growth slows

(+57 rather than +111%)

Emissions fall significantly

rather than rise (-60 vs +102%)

Source: Calculated from data used in Hatfield-Dodds et al (2007) ‘Leader, Follower, Free-rider’, see Hatfield-Dodds et al (2008) ‘Growing the Green Economy’

Economic growth and average income with ambitious action on climate change …

• 12.0%
• 10.0%
• 8.0%
• 6.0%
• 4.0%
• 2.0%

0.0% 2.0% 2000 2010 2020 2030 2040 2050

World: 450 ppm CO2e scenarios GDP per capita - deviation from reference

• 50

50 100 150 200 2000 2010 2020 2030 2040 2050 IIASA B1 ALPF GTEM MESSAGE IIASA B2 MESSAGE-NOBECS MiniCAM-BASE IIASA A2r FUND

World: 450 ppm CO2e scenarios GDP per capita

index 2010=100 B2 A2r

Source of charts: Klinsky , Hatfield-Dodds and Mizuno, 2012

World GDP per capita in 450ppm CO2e scenarios

Multiple global models (index 2010=100)

• 10,000

20,000 30,000 40,000 50,000 60,000 70,000 80,000 2000 2020 2040 2060 2080 2100

450-480 ppmv - A2r scenario (IIASA) World average OECD max OECD OECD min CPA (China) LAC (Brazil) FSU (Russia) Eastern Europe SA (India) Other max Other average Other min

GDP per capita for regional groups, 450-480ppm CO2e scenarios (IIASA A2r)

emissions reductions likely to slightly slow income growth but increase income security before 2050 sustainability policies are ‘pro-growth’ and ‘pro-wellbeing’ in the long run increased innovation (R&D) or resource efficiency could boost growth and security, with net income gains before 2050

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$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 1875 1900 1925 1950 1975 2000 2025 2050 Garnaut 450ppm scenario

Advanced Emerging Other developing All developing 1894 1951 1993 2009 2017 1972 2008 2040 2023

Incomedoubling point

2037

Calculated from Treasury (2008), major country groupings, Garnaut -25 (450ppm) scenario. Does not account for climate feedbacks or surprise, such as arctic methane releases.

Economic growth and average income with ambitious action on climate change …

(GPD per capita, US$ PPP)

How does change happen?

What are the preconditions

• f policy change?

How can we help achieve desirable change?

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How does governance evolve?

When do institutions ‘naturally’ respond to environmental threats?

damage time or activity

local impacts visible and understood reversible distant impacts ~ time ~ location ~ communities complex, poorly understood irreversible

How does governance evolve?

When do institutions ‘naturally’ respond to environmental threats?

damage time or activity (i) we understand causes and consequences: major determinants of system or resource condition, resilience, and impacts of different trajectories are well known (ii) we can do something about it: resource or asset subject to human influence, including that damage is reversible (iii) we want to do something: formal or informal arrangements can be crafted that result in perceived net benefits to key constituencies

from Arrow et al 1995 Science 268, Dietz el al 2003 Science 302

“the evolution of rules and norms that shape the management and use of shared resources to better meet the underlying needs and values of the group”

Adaptive Governance:

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more valuable

worthwhile , efficient, welfare enhancing

more valued

• attractive. politically possible

DISCOVERY ROLE raising (and answering) questions

linking cause and effect, identifying emerging issues

SOCIAL ROLE informing governance, being an honest broker

government licence to

• perate, identifying risks and
• pportunities

TECHNICAL ROLE informing management

identifying and assessing interventions in complex and complicated systems

What is the role of knowledge?

… and what is the role of science and scientists?

What needs to change?

Understanding and influencing nested layers of decisions and actions

norms rules and

• rganisations

individual actors

use of current assets asset choices

(acquisition and disposal) current and expected future

infrastructure

• ur understanding of

consequences

(norm activation)

prices, incentives governance, planning asset standards information – creation and sharing infrastructure governance

(and choices)

‘values change’

might help but is not central, necessary, or sufficient

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norms and culture rules and institutions market behaviour

SOCIAL SCOPE AND FOCUS

‘self contained’

SMIPLE

economy

ENVIRONMENTAL SCOPE AND FOCUS

natural resources as inputs interconnected

COMPLEX

systems pollution and feedbacks

Mapping disciplinary perspectives

political philosophy agricultural and resource economics ecological economics institutional economics human ecology environmental economics adaptive governance

Perspectives on science-policy links

Policy community Research community

commissioned research briefs policy settings and mechanisms governing research research inputs to policy policy

‘TWO COMMUNITIES’

research and policy communities have different roles, constraints, languages, values and goals

Political economy knowledge and power

– including research funding

moral content and perceived implications

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What governs the impact of research

• n policy?

‘ORGANISATIONAL EMISTEMOLOGY’

(Derry) ? ? ? ? ? ? ?

Policy community Research community

Political economy knowledge and power

– including research funding

moral content and perceived implications

– what does this mean for me?

Knowledge qualities rigour and transparency relevance and salience effective communication

Perspectives on science-policy links

What governs the impact of research

• n policy?

‘ORGANISATIONAL EMISTEMOLOGY’

(Derry)

‘LINKAGE AND EXCHANGE’

(Lomas) ? ? ? ? ? ? ?

? ? ? How can mutual engagement in knowledge process improve outcomes? ? ? ? ? ?

Policy community Research community

Political economy knowledge and power

– including research funding

moral content and perceived implications

– what does this mean for me?

Knowledge qualities rigour and transparency relevance and salience effective communication People and process engagement and learning trust and credibility

Perspectives on science-policy links

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policy

‘ADVOCACY COALITIONS’

(Sabatier and Jenkins-Smith) different types of actors form implicit or explicit coalitions to advance shared interests and policy outcomes

… ‘GOVERNMENT RATIONALITY’

(Foucault) power, knowledge and policy practice co-evolve and continuously interact

Policy community Research community

Political economy knowledge and power

– including research funding

moral content and perceived implications

– what does this mean for me?

Knowledge qualities rigour and transparency relevance and salience effective communication People and process engagement and learning trust and credibility advocacy roles? Mandate / social context world view and narrative compatibility, identity

Perspectives on science-policy links

Five challenges to achieving agreement to ‘valuable outcomes’

THE CHALLENGE POTENTIAL RESPONSES OTHER SUCCESS FACTORS Knowledge deficit Identify and address crucial gaps National technical capacity and culture Poor science-policy engagement Build two way links Honor and reward effort

• n both sides

Interest group politics Be expert Be trustworthy Establish a future anchor point and discuss transition Healthy environment for public discussion Wicked problems Embrace multiple complexities Embrace pluralism Be a midwife not a designer Institutional arrangements that match issue scope and physical scale Proxy worldview contests Use the full scientific toolkit – even social science! Learn from past mistakes Courageous and credible middle ground voices

What gets in the way?

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Three science modes

Governance Challenges in a Shrinking World, Steve.Hatfield-Dodds@csiro.au

unify

‘the science’ and our understanding

• f complex interconnected global systems

diversify

response options and perspectives

• n goals and strategies

pyramid funnel bow tie

Science-policy engagement is most to successful when it:

[1] is properly resourced,

drawing attention to enhancing the capacities of vulnerable countries, where timely precautionary action is likely to have the greatest benefits

[2] involves deep mutual partnerships

between experts (including scientists) and policy makers (including advisors and politicians) to boost and relevance, identify knowledge gaps, and build trust

[3] focuses on areas of agreement, and the balance of risks,

including the best available estimates of the range of consequences of different strategies (rather than ‘editing out’ information with lower certainty)

[4] seeks to ‘unify system understanding'

and ‘diversify societal response options'

to support the development of an overlapping consensus on a portfolio of actions

Key success factors

Four propositions for evidence based policy on contested issues

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Precaution and the state of knowledge

Steve.Hatfield-Dodds@csiro.au

risk

‘known’ impacts with ‘unknown’ probabilities

prevention

to reduce harm from known risks

uncertainty

‘likely’ impacts through known vectors with ‘unknown’ probabilities

precaution

to manage known potential impact vectors, while improving knowledge

ignorance

‘unknown’ impacts through uncertain vectors with ‘unknown’ probabilities

general precaution

to guard against catastrophic

• utcomes by reducing likely pressures

and developing response options, while improving knowledge

Case study:

What are the policy implications of climate economic?

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science and economic assessments geopolitics

• f national and

global action narratives and ‘currencies

• f action’

priorities for building momentum

Global, regional and national assessments support strong participation by major countries

Climate science is well known

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Presentation title | Presenter name | Page 29

Preferred stabilisation level, and peak) CO2e Likely long term temperature °C above 1900 Support for temperature < 2°C Stern (2006) 450-550ppm

‘but stabilisation at 450ppm already almost out of reach’

2.0-2.9 Yes Stern (2008) 500ppm or lower

‘550ppm is the upper limit of what should be contemplated’

2.5 or lower Yes Garnaut (2008) 450ppm (or lower) 2.0 Yes Weitzman (2009) ‘as low as possible’ na Yes Nordhaus (2008)

DICE-2007

>850ppm 4.9+ No Nordhaus (2010)

RICE-2010

550ppm, after peaking

• ver 700ppm

3.0* Yes

Economists arguing about ‘optimal solutions’ has concealed more fundamental consensus Economists arguing about ‘optimal solutions’ has concealed more fundamental consensus

Nordhaus DICE- 2007

simulated using PAGE

Stern Review (2006) findings

simulated using PAGE Source: World Bank 2010:8 (box 3), adapted from Hof, den Elzen, and van Vuuren 2008 (figure 10).

Net economic cost (percent)

• f climate and emissions reductions

versus ‘no abatement and no impact’ reference case

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Cumulative emissions budgets, and thus long run targets, are the main game

Copenhagen-Cancun-Durban not yet on track to limit warming to 2°C With a 2050 target to reduce global emissions to 50% of 1990 levels

Source: Rogelj et al 2010 Nature

lower end

• f range

+ 2050 target

to reduce global emissions 50% from 1990

lower end

• f range,

2020 only

50% chance of exceeding 3.0°C; 80% chance of exceeding 2.5°C 50% chance of staying under 2°C; but near certain to exceed 1.5°C

Hatfield-Dodds 2013 Nature 493: 35-36

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What do the models leave out? What do I want you to remember?

How can we help achieve desirable change?

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Seeking clarity

while recognizing complexity

input flows

• f materials, energy

information and value

Complex environmental systems

• natural resources
• waste assimilation
• amenity

Complex socio-economic systems

• producers & investors
• consumers
• community members
• citizens

return flows

(eg. wastes, investment, heat and information)

Promoting ‘adaptive governance’

Ask why apparently desirable governance changes are not happening ―Take plural values, worldviews and ‘understandings’ seriously Diagnose impediments or failures in the three domains: knowledge, solutions and consensus building ―Use a problem-centered interdisciplinary approach Develop remedies or strategies to correct these failures ―Practice ‘akido policy’ or research interventions … repeat as required

more valuable

worthwhile , efficient, welfare enhancing

more valued

• attractive. politically popular

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Looking for leverage

information

what is known? by whom? is it trusted? accessible? relevant? how can information and understanding be improved?

incentives

what are the risks? what are the benefits? to whom? when? what can be done? what matters to people?

institutions

(rules, habits, customs, policies)

what values are at stake? how do we think about the problem? who decides? how? who needs to act? when? who is responsible? for what?

Being strategic Strategic policy

is necessary when standard policy cannot work is anchored by a clear and durable long run goal establishes an adaptive policy framework

(building iteratively to the long run goal, such as through regular review

• f ‘targets’ and mechanisms)

deliberately shapes the context of future policy decisions and implementation

more valuable

worthwhile , efficient, welfare enhancing

more valued

• attractive. politically popular

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Understanding the system

Population Economic structure and trends Worldviews and ‘how we think’ Technologies evolving institutions, policies and governance information and knowledge building processes public deliberation: towards consensus, polarization, fragmentation patterns of incentives and feedbacks Drivers Shapers Pressures and

• pportunities

Impacts and

• utcomes

From questions to action:

The art of akido policy

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There is no wealth but life …

John Ruskin (1862)

Steve Hatfield-Dodds Research Director, CSIRO Integration and the Australian National Outlook project, CSIRO Adjunct Professor, Crawford School of Economics and Government, ANU t +61 2 6246 5597 e steve.hatfield-dodds@csiro.au w www.csiro.au/

CSIRO INTEGRATION