Raisa Kabir, Bangladesh, age Billion people in poverty 25% of children malnourished 1/6 people without clean water 1.6 Billion people without modern energy Maria Kassabian, Nigeria, age 10 Giselle Lau Ching Yue, China, age 9 Netpakaikarn Netwong, Thailand, age 14

New finance, new instruments and new pressures are helpiJng build momentum T HE C HANGING C LIMATE FOR D EVELOPMENT Rosina Bierbaum Dean, School of Natural Resources and the Environment, University of Michigan Co-director, WDR 2010 January 11, 2010

New finance, new instruments and new pressures are helping build momentum C LIMATE CHANGE IS A THREAT TO DEVELOPMENT BUT A CLIMATE - SMART WORLD IS POSSIBLE IF WE … Act now Act together Act differently New finance, instruments and pressures are helping build momentum

Source: Smith and others, 2009 S CIENTIFIC CONSENSUS : SERIOUS AND IMMEDIATE 2001 assessment2007 assessment Risks to unique and threatened systems Risk of extreme weather events Distribution of impacts Aggregate impacts Risks of large scale discontinuities Increase in global temperature since preindustrial era (°C) 2°C over preindustrial Today = + 0.8°C

D EVELOPMENT CONSENSUS : T HE POOR WILL SUFFER MOST High-income countries Developing countries Historical cumulative emissions billion people 1.1 billion people Impact damage costs

A CLIMATE - SMART WORLD IS POSSIBLE … Annual public subsidies Private funding for energy R&D

A HUGE CHALLENGE …. BUT IT CAN BE MET IF WE ACT NOW ACT TOGETHER ACT DIFFERENTLY

A CT NOW : T ODAY ’ S ACTIONS D ETERMINE TOMORROW ’ S OPTIONS Inertia in the climate system Inertia in the built environment Inertia in institutions and individuals’ behavior feasibility costs political momentum

A CT NOW : O R THE 2˚C TRAJECTORY IS OUT OF REACH Projected annual total global emissions (billion tons of CO 2 equivalent)

A CT TOGETHER : H IGH - INCOME COUNTRIES NEED TO TAKE THE LEAD

A CT TOGETHER : B UT ALL HAVE A ROLE TO PLAY TO MANAGE COSTS Marginal mitigation cost ($/tCO 2 e) Mitigation potential (GtCO 2 e/year) Marginal cost, all countries Mitigation measure in a developing country Mitigation measure in a high-income country Negative costs: Long-term savings outweigh initial costs Advanced technologies: carbon capture and storage Efficiency in buildings Efficiency in motors, cars, and electricity co- eneration Land-use and land-use change, mostly in developing countries Small hydro and nuclear in developing countries Renewable energy: Wind and solar Marginal cost, all countries Gt of foregone mitigation Marginal cost, only high-income countries Additional cost of achieving 10 Gt of mitigation

Global food trade depends on very few countries A CT TOGETHER : AND COOPERATION HELPS BUFFER SHOCKS

A CT DIFFERENTLY : R ADICALLY TRANSFORM ENERGY SYSTEMS Energy efficiency ,000 1, , Global primary energy mix (exajoules) Year

M AKING IT HAPPEN : T HE T ECHNOLOGY CHALLENGE : M ASSIVE SCALE UP OF CCS box figure 7.5

A CT DIFFERENTLY : R ADICALLY TRANSFORM ENERGY SYSTEMS

A CT DIFFERENTLY : M AKE ROBUST RATHER THAN OPTIMAL DECISIONS

A CT DIFFERENTLY : M ANAGE CONTINGENCIES BETTER

A CT DIFFERENTLY : M ANAGE FOR MULTIPLE STRESSES map FB.1

Infrastructure to withstand new “extremes” Seed varieties that perform well in droughts/floods/heat Prioritize lands to preserve and manage multiple threats Increased need for social safety nets / insurance Emergency response plans, early-warning alert systems Weather and climate monitoring / regional assessments Information systems / best practices A CT DIFFERENTLY : M AKE ROBUST RATHER THAN OPTIMAL DECISIONS

M AKING IT HAPPEN : N EW RESOURCES

M AKING IT HAPPEN : T HE FINANCING CHALLENGE Critical to reconcile equity and efficiency Requires massive scaling up: Costs: some $ Bn in 2030 Financing: up to $550 bn in associated mitigation finance Can be done: Costs = 0.4% of high-income country GDP to 2100 Financing = 3% of current global investments But requires all options available

M AKING IT HAPPEN : T HE FINANCING CHALLENGE : I MMEDIATE NEEDS Reform carbon markets: Reform project-based CDM REDD Land emissions and soil carbon? Black Carbon? Leverage private finance: Better information on climate trends and risks Investment climate conducive to low carbon investments Limited potential for public–private partnerships? Risk finance (e.g., cat bonds, insurance) Allocation mechanism for adaptation finance

To support communities and decisionmakers Low-tech and high-tech M AKING IT HAPPEN : N EW INSTRUMENTS

M AKING IT HAPPEN : I NCREASE THE PACE OF INVENTION figure 7.4

M AKING IT HAPPEN : SUPPORTING POLICIES Abatement cost Abatement potential Energy Efficiency Renewable Energy New Technologies 0 Policy Tools Regulations and financial incentives Financing mechanisms Institutional reform Feed-in Tariff or Renewable Portfolio Standard Tax on fossil fuel Support for R&D Financing incremental cost Transfer technologies Energy pricing reforms

We’ve come a long way Drumbeat of science Politics are changing Cities, states and countries are taking action Individuals, business and organizations are responding More is needed to turn awareness into the needed actions “ Soft” policy tools – communication and education; social norms M AKING IT HAPPEN : N EW PRESSURES

More is needed: Access to energy is not even

“It is our collective responsibility to find ‘unselfish’ solutions and fast before it’s too late to reverse the damage caused every day.” Maria Kassabian, age 10, Nigeria

climatechange/

Climate change is underway: Temps have warmed globally, but some regions warmed more than others over the last 30 years WDR, map FA.1a

Climate change is underway: Global precipitation has increased, but some continents are showing drying WDR, map FA.1b

High-income countries need to significantly reduce emissions…

Making it happen: The Technology challenge