Business Perspectives: The Global NDC Portfolio Dr. Brian P. - - PowerPoint PPT Presentation

Business Perspectives: The Global NDC Portfolio

• Dr. Brian P. Flannery

November 18, 2016

Business perspectives on INDCs

• INDCs: What we know, don’t know
• Important to consider economy-wide and global interactions of INDCs
• Illustrative study of national and global implications

Based on the RITE Integrated Assessment Model (IAM)

• Opportunities for business to inform international processes

(Transparency, Global Stocktake)

Business engagment can inform formal and informal processes to review and renew NDCs (challenges and opportunities to strengthen Paris Agreement)

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What we know and don’t know about INDCs

Many INDCs do not provide clarity on:

• Assumptions that underpin the INDC, e.g. population, GDP, productivity

growth, availability of technologies and other options…

• Policies to implement action
• Metrics to evaluate outcomes (if not economy-wide emissions)
• Financial (and other) transfers to developing nations

Hinders efforts to inform transparency processes on INDCs now, on progress and trends (going forward), and future updates to (I)NDCs

Creates challenges and opportunities for:

• ex ante projections now
• progress, trends and ex post results going forward
• discussion of comparability of effort
• update of (I)NDCs

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Economy-wide and global interactions

Outcomes cannot be assessed sector by sector, or without considering the global portfolio: feedbacks and interactions are ubiquitous... IAMs provide this capability

• IAMs are a fundamental tools used by academics, research institutions and many

nations to assess national and global climate policy (central to IPCC WG 3)

• Business and governments have supported IAM R&D for decades… and

provided input, e.g., on energy outlooks, technology options and representation

• f climate and energy policies
• IAM analyses will play a central role informing in analyses of (I)NDCs and as

input to strategic planning by governments, business, academia and think tanks

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To simulate economic and environmental outcomes resulting from INDCs modelers must “fill in the blanks” and specify assumptions, policies and

• ther technical information missing in proposed national INDCs

Comparison of emission reduction ratios (in 2030 from a base year of 2005)

235.4 180.9 116.9 38.2 32.8 32.2 30.1 19.7 19.0 15.6 14.2

• 5.3
• 25.4
• 26.0
• 27.0
• 30.0
• 30.0
• 34.8
• 44.5
• 51.6
• 100
• 50

50 100 150 200 250 300 India Turkey China South Africa Mexico Ukraine Thailand Kazakhstan Belarus Non-EU countries) Russia Korea Japan Australia United States New Zealand Canada EU28 Norway Switzerland GHG emission compared to base year (2005) (%) East Europe(Non-EU countries)

larger smaller

United States (2025)

NDCs for 20 regions on a common basis from 2005 to 2030

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Comparison of CO2 marginal abatement costs

1 4 12 14 27 33 54 58 70 85 95 144 166 210 378 380

50 100 150 200 250 300 350 400 China Ukraine India Turkey South Africa Russia Belarus Kazakhstan Mexico Australia Thailand East Europe (Non-EU … Norway United States New Zealand Korea Canada EU28 Japan Switzerland CO2 marginal abatement cost ($/tCO2)

East Europe(Non-EU countries)

bigger smaller

United States (2025)

All INDCs implemented with an economy-wide, domestic GHG tax (theoretically the least-cost policy to achieve the pledge)

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Comparison of retail electricity prices

1.8 5.2 5.4 5.6 7.7 8.4 8.6 10.5 11.0 11.4 12.3 13.5 15 15.9 15.9 23.5 24.2 27.7 33.9 35.8

5 10 15 20 25 30 35 40 Russia India Ukraine Korea South Africa Kazakhstan Norway China Canada Mexico Belarus Thailand East Europe (Non-EU … United States Turkey New Zealand Australia Switzerland Japan EU28 Electricity (household) price（UScent/kWh）

East Europe(Non-EU countries)

higher lower

United States (2025) 7

50 100 150 200

1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

GHG emissions (GtCO2-eq./yr)

Historical emissions Emission outlook under current policies +2.5 ºC stabilization under climate sensitivity of 2.5 ºC (around +2.6 ºC in 2100 and +3.0 ºC in 2200 under C.S. of 3.0 ºC） +2 ºC stabilization under climate sensitivity of 2.5 ºC; temporary overshoot of 580 ppm (+2.5 ºC stabilization under C.S. of 3.0 ºC) Below +2 ºC in 2100 under climate sensitivity of 3.0 ºC; temporary overshoot of 530 ppm +2 ºC stabilization under climate sensitivity of 3.0 ºC; temporary overshoot of 500 ppm and around 450 ppm in 2300 INDC submitted by October 1 (119 countries) assumed to be implemented

around +2 to 2.5 ºC around +2.5 to 3 ºC Baseline emissions reported in the IPCC AR5 below +2 ºC

GHG emissions of the aggregated INDCs & pathways to 2100 toward 2 °C goal

Source: Estimate by RITE

About 70$/tCO2 in 2050 even under the least cost measures About 320$/tCO2 in 2050 even under the least cost measures About 6$/tCO2 in 2030 under the least cost measures to achieve the expected global emission reductions by INDCs

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Insights from IAMs…

Ex ante assessment: assumptions, policies, anticipated outcomes

• Understanding of the INDC
• Comparability of national efforts
• Implications for competitiveness: investment, trade
• Need to account for economy-wide interactions:

across sectors, supply and value chains

• Need to account for global interactions

trade, investment, wealth transfers Ex post review to inform future pledges

• Validity of assumptions
• Effectiveness of policies
• Consequences of unforeseen (not in the plan) developments

natural events, recessions, technology change

Business perspectives can make key contributions to inform domestic and global assessments

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Going forward the Major Economies Business Forum…

Intends to organize and contribute to workshops and other efforts to help understand both domestic and international progress under the Paris Agreement Will engage business, governments, the UNFCCC, academic and research institutions in dialogue to complement formal “transparency processes” to assess NDCs and take stock of collective action under the Paris Agreement

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Thank You

• Dr. Brian P. Flannery

bpflann@gmail.com www.bizmef.org