Creating a Global Deal on Climate
Change: Responsibilities andOpportunities
Nicholas Stern
Chair of the Grantham Research Institute on Climate
Change and the Environment,
IG Patel Professor of Economics & Government,
London School of Economics and Political Science
Blue Planet Prize
19 October 2009

Four Part Structure• Section 1: Global targets.
• Section 2: Possible emissions scenarios formajor
economies.
• Section 3: Key areas for actions; costs;
opportunities.
• Section 4: An ambitious global deal,
leadershipand recentdevelopments.
2

From people to emissions•The combined effects ofgrowth, industrialisationand hydrocarbon use
substantially increased
flows of greenhouse gas
emissions: thus
concentrations of stocks
have grown from285ppm in the mid 19thcentury to over 430ppm
CO2e today.

3

From people to emissions•

Over the next 20 years
developing countries
will play an increasingrole in driving growthin overall emissions.

•Per capita emissions
for rich countries aremuch higher.

Source: Climate Analysis Indicators Tool (CAIT)

4

From stocks to temperature
Stabilisation level (in ppm CO2e)

2˚C

3˚C

4˚C

5˚C

6˚C

7˚C4507818310050096441131055099692472165010094582494750

100998247229Extrapolations from Murphy et al. 2004
Source: Meinshausen 2006; Murphy et al. 2004; calculations.

•We are already over 430ppm CO2e, and are adding at a rate of over 2.5ppm per year (likely toaccelerate with little or weak action). BAU will take us over 750ppm by the end of the century.

•This level of concentration would result in a large probability, around 50% or more, of an eventual
temperature increase of more than 5oC compared with the pre-industrial era. This would beenormously destructive.

•Physical and human geography would be transformed. The planet has not seen suchtemperatures for 30 million years. Potential cause of migration of billions of people around theworld.

5

What our targets should be
100
Business as Usual

90450ppm CO2e

Global Emissions (GtCO2e)

80500ppm CO2e scenario 170500ppm CO2e scenario 260500ppm CO2e scenario 3

5040

At least 65GtCO2e
reduction from BAU

3020
1002000• Source: Stern
Review - updated2010

2020

2030

2040

20502060

2070

2080

2090

2100

•Holding below 500ppm CO2e, and reducing from there, is necessary to give a reasonable chance of staying below 2 degrees. Thisrequires bringing emissions down to below 20Gt CO2e (approx. 50% of 1990 levels) by 2050; reducing by a minimum of 65Gt relative toassumed BAU. Would reduce the risk of a 5ºC increase to less than a 5% probability.

•A range of trajectories is possible – later peak years require stronger action later on.

•As global population likely to be around 9 billion in 2050, these simple headline numbers imply average emissions around 2 tonnes perperson.

•Cannot afford any delays: a delay of 10 years in initiating action would be likely to increase the ‘starting concentration’ from around435ppm CO2e to over 465ppm CO2e, making required deductions more costly or impossible.

•To simplify, this presentation examines trajectories with around 50Gt CO2e in 2010, 35Gt CO2e in 2030 and 20Gt CO2e in 2050.

•6

Four Part Structure• Section 1: Global targets.
•• Section 2: Possible emissions scenarios
formajor economies.
• Section 3: Key areas for actions; costs;opportunities.
• Section 4: An ambitious global deal,leadershipand recentdevelopments.
7

Emissions scenarios consistent withglobal emissions of 35 GtCO2e in 2030
Table 1: Emissions Scenarios Consistent with Global Emissions of 35 GtCO2e in 2030.
Emissions in 2030
Scenario for emissions (em) change to 2030

USA

EU 27 & Japan
tCO2e
Total
percapita(GtCO2e)tCO2epercapita

Rest of the World
tCO2e
Total
percapita(GtCO2e)

Total(GtCO2e)

20.8

31.3

5.3

7.9

-3.8

-16.5

6.2

10.4

15.6

5.3

7.9-0.2

-0.9

9.9

6.2

5.2

7.8

2.6

4.0

2.5

10.9

3.1

4.9

3.1

20.8

31.3

5.3

7.9

-2.4

-10.3

8.3

3.1

4.9

3.1

10.4

15.6

5.3

7.9

1.2

5.3

8.3

3.1

4.9

3.1

5.2

7.8

2.6

4.0

4.0

17.1

Scenario 1: Overall growth: India & China 7%,
US, EU27 & Japan 2.5%.
em/output: India & China constant; US, EU27& Japan halving.

16.6

6.2

9.9

6.2

Scenario 2: Overall growth: India & China 7%,
US, EU27 & Japan 2.5%.
em/output - India constant; China, US, EU27 &Japan halving.

16.6

6.2

9.9

Scenario 3: Overall growth: India & China 7%,
US, EU27 & Japan 2.5%.
em/output - India halving, China decrease byfactor of 4; US, EU27 & Japan halving.

16.6

6.2

Scenario 4: Overall growth: India & China 7%,
US, EU27 & Japan 2.5%.
em/output: India & China constant; US, EU27& Japan decrease by factor of 4.

8.3

Scenario 5: Overall growth: India & China 7%,
US, EU27 & Japan 2.5%.
em/output - India constant, China halving; US,
EU27 & Japan decrease by factor of 4.
Scenario 6: Overall growth: India & China
7%, US, EU27 & Japan 2.5%.
em/output - India halving; China, US, EU27& Japan decrease by factor of 4.

China
India
USA
EU27 & Japan
Rest of the World
Source: UN 2008 World Population Prospects

India

Total(GtCO2e)

Total(GtCO2e)

Assumptions:

China
tCO2e
percapita

tCO2epercapita

Population (bn)Emissions percapita (CO2e)

2010
1.4
1.2
0.3
0.6
3.4

2010
2010
6.0
8.1
1.7
2.0
25.1
7.5
12.1
7.5
7.8
26.8
Sources: Climate Analysis Indicators Tool (CAIT) & Global Carbon Budget Project.

2030
1.5
1.5
0.4
0.6
4.3

Total emissions(GtCO2e)8Four Part Structure• Section 1: Global targets.
• Section 2: Possible emissions scenarios
formajor economies.
• Section 3: Key areas for actions; costs;opportunities.
• Section 4: An ambitious global deal,leadershipand recentdevelopments.
9Key areas for actions•

Energy efficiency– Great scope for energy efficiency improvements across all countries.
– Japan similar energy use (kWh) per dollar of GDP to many European countries.

•Low-carbon technologies– Japan a leader, e.g., Hybrid Vehicle Technology.
– Strong technology policy essential to ensure rapid development and diffusion oflow-carbon technology.

•

Halting deforestation, particularly in the tropics– Significant investment required in agricultural productivity, local economies,governance and enforcement.
– China and India have strong objectives on reforestation.

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Costs and opportunities•

Annual costs of strong action on mitigation over next few decades aremanageable - around 1% to 2% of world GDP. Small relative to costs of inaction.

•Transition to low-carbon economy will be one of the most exciting and dynamic
periods in history; innovation, discovery, investment. Comparable to the arrival ofrailways and electricity in industrialised countries.

•Low-carbon growth will be more energy secure, cleaner, quieter, safer, more biodiverse, as well as cutting climate risks.

•Many large long-term funds seeking opportunities.

•High-carbon growth will kill itself, first on high hydrocarbon prices and, more
fundamentally, on the hostile environment it will create.

11Four Part Structure• Section 1: Global targets.
• Section 2: Possible emissions scenarios for
major economies.
• Section 3: Key areas for actions; costs;
opportunities.
• Section 4: An ambitious global deal,leadershipand recentdevelopments.
12

An ambitious global deal
A deal must be effective, efficient and equitable. A deal that fails on one or more ofthese fundamental principles will not be sustainable.
•Effectiveness – it must lead to the necessary cuts in emissions of greenhouse gases;•Efficiency – it must be implemented in a cost-effective way, with mitigation focussed
where and when it is cheaper; and•Equity – it must take account of the fact that it is poor countries that will be hit earliest
and hardest, while rich countries have greater wealth, more technology and a particularresponsibility for the cause through their past emissions. Implies strong reduction
targets in rich countries, significant funding for mitigation and adaptation, and sharing oftechnologies.

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An ambitious global deal•Six key numbers

<50Gt

<35Gt

<20Gt>80%

US$100bn US$100bn– Agreement must be based on the foundations laid out in the “Bali Roadmap”.

– The developed world must lead with strong and credible targets in 2020 and2030 towards a reduction of at least 80% by 2050. This would bring Europe andJapan close to the 2 tonnes per capita world average required by 2050.

– The developing world will be 8 out of the 9 billion people in 2050 – they must be
centrally involved. Even if rich countries were zero the average could not exceed
2.5 tonnes per capita.

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An ambitious global deal•

The developing world could give a “commitment to commit” to targets within 5-10years based on the following conditions:– Strong performance by the developed world over the next decade towards
meeting targets for 2020 and 2030 (consistent with 80% by 2050 relative to1990);– Financial support for strong action on mitigation in the developing world and tohalt deforestation: $100bn (significant proportion from carbon market) in early2020s increasing thereafter (Source: HDR 2007-8);– Rich countries to develop and share new technologies for low-carbon growth;– Substantial assistance for adaptation: $100bn in early 2020s increasingthereafter (Source: UNDP & UNFCCC).
– Commitment now extending over the next few years to support climate change
action plans in developing countries.

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Japan’s leadership on climate change•

Japan’s leadership and example is needed to deliver an effective, efficient andequitable deal.

•New targets are more ambitious, 25% cut on 1990 levels by 2020.

•This commitment would see Japan’s emissions fall to around 7.2 tonnes per capita
CO2e in 2020, from around 12 today. This represents a cut in emissions per unit ofoutput of factor 2.2.

•A cut by a factor of 1.8 in the next decade would reduce emissions per unit of output
2010-2030 by a factor of 4.

•Policies announced to achieve this: domestic cap-and-trade, feed-in tariffs.

•This strong commitment is, however, conditional. It is “premised on agreement on
ambitious targets by all the major economies”.

•Emissions reductions should not be interpreted as “burden sharing”. This is anexciting period of investment and opportunity.

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Recent developments•

UN Climate Change Summit in NY (September)– Prime Minister Yukio Hatoyama confirmed Japan’s ambitious commitments andannounced policies to achieve these targets.
– President Hu Jintao announced China will make “notable” reductions in carbon
intensity. Likely to be incorporated into 12th 5 year plan.
– Minister Jairam Ramesh announced India’s intention to quantify emission reductions
based on current mitigation policies, e.g., 2020 Solar plan.

•Rich countries must recognise their responsibilities and show leadership.

•Must find a way to navigate through domestic politics of individual countries.

•This is about long-run opportunity. Must counter any short-run “push back”.

•Japan is setting a strong example.

17