Theorising an instrument for a ‘Low Carbon Bretton Woods’

Dr. Michele Stua

SPRU – Brighton, 2 May 2014

Index

Frameworks The instrument: Global Emissions

Reduction (GER) Effects analysis Open elements and conclusions

Frameworks Contextual framework

– Climate Change (CC)– Persistent regional economic crises– Current living systems' sustainability– Enduring crisis of the current economic mode

Policy framework– Climate change negotiations

Theoretical framework– Multi-level perspective– Transition management

Persistent problems“1. The rebound effects from energy efficiency improvements are significant and limit the potential for decoupling energy consumption from economic growth. 2. The contribution of energy to productivity improvements and economic growth has been greatly underestimated. 3. Sustainability requires both improved efficiency and a principle of 'sufficiency'. 4. Sustainability is incompatible with continued economic growth in rich countries. 5. A zero-growth economy is incompatible with a fractional reserve banking system”.

Sorrell, 2010, pp. 1784-1785

Persistent problems“The world today is very different from the one faced by the global leaders who met to plan the post-war economy in 1944 in Bretton Woods [...]. The emphasis on GDP in developed countries now fuels social and environmental instability. It also blinds developing countries to possibilities for more-sustainable models of development [...]. Nonetheless, GDP remains entrenched [...]. Much of the problem is that no alternative measure stands out as a clear successor. Creating that successor will require a sustained, transdisciplinary effort to integrate metrics and build consensus”.

Nature, 2014, p. 284-285

Persistent problems

“In the context of the international climate change negotiations, the issue of equity has [...] implied that the burden of mitigation lies mostly, if not exclusively, with high-income developed nations [...]. One weakness of framing the problem exclusively along these lines is that it [...] effectively ignores the different benefits that could be provided by wider or deeper global action to reduce emissions”.

Garibaldi, 2014, pp. 82-83

Persistent problems

“As long as the UNFCCC inhabits a world divorced from modern structural realities [...] the vested interests that feel threatened, and the countries (and groups within them) who consider tackling climate change to be someone else’s responsibility, will continue to drag everything to the lowest common denominator”.

Grubb, 2014, p. 326

“The interesting idea is that now accelerated by the economic crisis, political windows of opportunity open up to take more substantial steps towards sustainability transitions”.

Loorbach and Lijnis Huffenreuter, 2013, p. 43

The instrument: Global Emissions Reduction

(GER)

GER objectives Boosting anthropogenic greenhouse gases (GHGs)

emissions reductions Boosting economy worldwide Transforming energy systems Supporting sustainability (in all its meanings) Leading to more equitable wealth distribution Stimulating a renewal in financial systems Introducing an international representative currency Contributing to the establishment of a new ‘green deal’ Supporting scientific research on climate change

GER scope An anthropogenic GHGs emissions reduction target must

be agreed between the parties A distribution of global emissions duties must be approved A mandatory non-compliance compensation must be

defined and accepted by all the parties An international institution (the International Climate Fund –

ICF), to issue reductions certifications (the GERs) and recognise parties' duties compliance, must be instituted

Any actor from parties shall be entitled to produce, sell, buy and trade GERs inside and within the same parties

GER functioning Setting up a new global representative currency

(commodity)– GHGs can be defined as a measurable commodity,

becoming finite once defined a global emissions cap– GHGs provisions are given by the emissions levels of the

different parties referring to the year defining the cap– GHGs agreed reduction corresponds to an agreed binding

consumption of the commodity, distributed through the emissions duties between the parties

– The commodity consumption is recognised only after presentation of GERs, corresponding to effectively happened reductions

GER functioning (cont.)

Setting up a new global representative currency (currency)– GERs become then the only currency representing

the GHGs commodity– In a context of quantified reductions in specified

time-period, the maximum amount of possibly circulating GERs is defined since the beginning

– The direct correspondence between GERs and GHGs reductions maintains their fixed exchange rate

GER functioning (cont.) GER technical functioning shall in principle follow the

already tested clean development mechanism (CDM) system, supported by two main reforms

The first reform lies upon the identification of emissions duties for any involved party

The second reform lies upon the extension to any involved actor of the rights to produce and trade GERs anywhere between and within the parties

Extending both emissions duties and reduction activities worldwide will imply the overcoming of the additionality issue

GER functioning (cont.)

GER functioning in a multi-level perspective– Climate change representing the landscape for a

variety of regimes– Related regimes include both GHGs emitters and

GHGs affected systems– GER functions as tool to cope with regimes

persistent problems– GER functions as tool to change rules inside the

regimes– GER functions as tool to open windows of

opportunities for new actors to enter the regimes

Effects analysis

Effects contextualisation GER's effects shall be framed as multi-level and multi-

domain– A single effect may simultaneously affect different domains– A single effect may simultaneously act at different levels– Combinations of effects may lead to specific effects both in

levels and domains Three main typologies of effects

– Direct– Potential– Mixed

A complete effects' identification and categorisation is constrained by GER's flexibility

A domain-based approach is conceived as starting point

Most of the proposed effects are still incomplete in their development

Most of the proposed effects contain forms of policy proposals

Effects contextualisation (cont.)

GHGs emissions and CC scientific debate contribution (direct)

Economy (direct/mixed) Energy (direct/mixed) Sustainability (direct/mixed/potential) Finance (direct/mixed) Monetary system (direct/mixed/potential)

Effects by domain

Effects in a multi-level perspective

GER activation and effects will lead to a radical transformation of CC-related regimes

Persistent problems affecting regimes (i.e.: rebound effect, environmental integrity, economic sustainability, monetary lock-in) will be overcome

Regimes' radical transitions aim to lead to a change at landscape level (CC)

Open elements and conclusions

Open elements

Activation– GER activation requires a strong and

generalised policy acceptance of its principles and structure

– Efforts must be concentrated in filling the existing gaps between the current status of the proposal and required agreements for a real GER activation

– Time constrains represent the biggest challenge to the proposal

Open elements (cont.)

Effects– Involved actors reactions to GER effects cannot

be clearly previewed or estimated– GER effects can be manipulated at any level

through the adoption of tailored policies and strategies

Open elements (cont.) Duration

– GER has been designed as a temporary instrument that will be exhausted by the achievement of a virtually zero global anthropogenic GHGs emission rate

– A totally new instrument will be required for the following stage and relevance shall be given also to early studies on it

Conclusions Climate change negotiations represent the

ultimate international framework to discuss and agree on a radical systemic transformation

The transformation shall encompass a variety of domains, overcoming the mere climate change

The here-proposed instrument represents an ambitious but viable option for the transformation

Conclusions (cont.) The instrument requires substantial technical

and political efforts to be set up Its effects are likely to have a steady

influence on all involved parties The instrument has a deadline represented

by the virtually zero anthropogenic GHGs emissions level

A new proposal to define the 'post-GER' shall be studied and developed along the years

ReferencesGaribaldi, J., A., 2014. The economics of boldness: equity, action, and hope. Climate Policy, Vol. 14, No. 1, 82–101.

Grubb, M., 2014. Climate policy: a new era. Climate Policy, Vol. 14, No. 3, 325–326.

Loorbach, D., A., Lijnis Huffenreuter, R., 2013. Exploring the economic crisis from a transition management perspective. Environmental Innovation and Societal Transitions 6 (2013) 35-46.

Nature, 2014. Time to leave GDP behind. 16 January 2014, vol. 505, Nature, 283–285.

Sorrell, S., 2010. Energy, Economic Growth and Environmental Sustainability: Five Propositions. Sustainability 2010, 2, 1784-1809.

Thank you