the davos climate/energy brief
DESCRIPTION
A presentation held by Mr Allan Larsson at the seminar on the Swedish Embassy in Berlin on the 17th of January.TRANSCRIPT
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Potsdam Institute and Global Utmaning ,
Swedish Embassy in Berlin, January 17, 2011
A post-Cancún agenda to break the political
deadlock on climate investment
- The Davos Climate/Energy Brief
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The Davos Climate/Energy Brief
The Theme of the World Economic Forum in
Davos,26-30 January 2011:
”Shared norms for the New Reality”
Our Brief focuses on the New Reality in Climate negotiations
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The New Reality: 1. The political deadlock in the
UN-process
Copenhagen, Cancún, Durban
-no global treaty in sightin spite of twenty years of
climate negotiations
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The New Reality: 2. The Investors
Dilemma- Copenhagen and Cancun left the business
community ”confused about…the wider…economic implications”
-”a stable global carbon price is neccessary to form the cornerstone of any successful
policy in the longer term” (IEA)
- still, no global CO2-price in sight
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The New Reality: 3. ”The Green Race”
3. ”
- The EU presently the leader in clean tech export
- Asian countries determinedto win the race
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The New Reality:Emerging consensus on
energy*)
Climate: an energy revolution is needed to tackle climate change
Energy Security: reduced global pressure on oil is needed
The Economy: a low carbon future is a powerful tool for economic modernization
*) International Energy Agency, World Bank, EU Commission, Major Economies Forum, World Business Council for Sustainable Development, European Climate
Foundation
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Investing in a low carbon future
- the hard choice:
Two main avenues to level the playing field for
climate investments
- more subsidies?
- or a CO2 price?
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Our contribution to a post-Cancun Agenda:
Three elements
1.Focus on investment and technology, ”sharing opportunities”!
2.Agree on the principle of a technology neutral carbon price!
3.Introduce a bottom up approach, building an International Climate Investment Community, as a complement to the UNFCCC-efforts to get 192 countries to agree on a global deal!
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A technology neutral CO2 priceThe aim:
levelling the playing field between fossil technologies and low carbon technologies
The level:- the present CO2 price 15 € a ton is ”subsidised”
by 25 €/ton, at least 40 Euro/ton is needed by 2020
The effect: ”Pricing carbon .. is the optimal way of both
generating carbon-finance resources and directing those resources to efficient opportunities” (The
World Bank)
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A technology neutral carbon price
- how- A price trajectory to 2020
- A mix of national policies
- Using cap-and-trade and CO2- taxation
- ”less on what we earn, more on what we burn”
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Three reasons for a technology neutral CO2
price
- business and consumers, not governments, will choose
technologies
- will create predictability for sustainable energy investment
- will bring revenues for the greening of the tax systems
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An International Climate Investment
Community- a European initiative
- inviting like minded countries to agree on the basic principles
- growing step by step to an International Community (as the WTO and as the EU did)
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- a complementary approach to the UNFCCC-process, not an
alternative one
- more flexible, more ambitious
- some key issues addressed, not all
- similar initiatives exist, could be integrated
A concept – not a blueprint
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The Davos Brief:
- to be discussed in Berlin, Washington and New York this week as an input
to the Davos meeting
- Input to discussions after Cancun among European and likeminded
countries
- Next step: An Indepdendent Commission on Climate Investments?
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Subsidising or pricing to level the playing
field?
- att all nödvändig teknik blir lönsam
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A price trajectory to guide investors
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Development of the Swedish CO2 tax general level and industry level
from 2008 industry outside EU Emissions Trading Scheme (EU ETS)
0
20
40
60
80
100
120
1991
1992
1993
1994
1995
1996
1997
1998
1999
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2001
2002
2003
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2015
Carbon tax (euro/tonne) Carbon tax, industry level (euro/tonne)
General level for 2010 level in figure