Sustainable Energy and Climate Change: Challenges for Regional Policy Solutions Prof. Dr. Claudia Kemfert Deutsches Institut für Wirtschaftsforschung Hertie School of Governance 26.04.2019 Prof. Dr. Claudia Kemfert

1. Challenge: Fossil Fuel Scarcity 26.04.2019 Prof. Dr. Claudia Kemfert

Prof. Dr. Claudia Kemfert Facts on Energy Global oil supply can be enlarged up to 100 Mio. barrel/day only with substantial investments in oil exploration If oil demand will increase substantially, peak oil might be reached in 2020 Global energy demand will double by 2030 Especially energy demand of fast growing countries like China and India will explode Russia/Iran: high gas reserves - what about the future? 26.04.2019 Prof. Dr. Claudia Kemfert

Global Energy Demand 2005-2030 - IEA 2008 Mtoe Quelle: IEA World Energy Outlook 2008 26.04.2019 Prof. Dr. Claudia Kemfert

Necessary Investments 2007- 2030 Quelle: IEA World Energy Outlook 2008 26.04.2019 Prof. Dr. Claudia Kemfert

Oil Market – Scarcity and Difficulties Global Oil Demand ? Huge Investment necessary Source: IEA World Energy Outlook 2008 26.04.2019 Prof. Dr. Claudia Kemfert

2. Challenge: Climate Change 26.04.2019 Prof. Dr. Claudia Kemfert

Projection of World Energy Related CO2 Emissions 26.04.2019 Prof. Dr. Claudia Kemfert

Stern report: Are we moving in the right direction? Costs of international climate policy with international emissions trading: 1 % of global GDP Costs of non-action: up to 20 % of global GDP Benefits: up to 20 % of global GDP 26.04.2019 Prof. Dr. Claudia Kemfert

Prof. Dr. Claudia Kemfert Carbon Leakage Can be a problem, especially with high emission reduction goals only in one region Environmental capital flight-reallocation of firms from abating countries to non abating countries Solution: global climate agreement; global emissions trading system 26.04.2019 Prof. Dr. Claudia Kemfert

Climate policy agreement necessary G20: “2 °C” target : binding emission reduction target EU: 20-20-20 target by 2020 USA: energy efficiency improvement, renewable energy, drastic emission cut (?) Australia (?), Canada (?), Russia (?) UN Conferences: developing countries; adaptation fund Fast Growing Countries will follow soon (China, India) 26.04.2019 Prof. Dr. Claudia Kemfert

Solution: Climate Protection Climate protection is economically efficient Energy saving important (buildings, mobility) Future markets are green markets CO2 free, save and affordable energy is key Coal: carbon capture and storage (CCS) Renewable energy Sustainable mobility Climate change causes high costs Climate protection offers huge economic potentials 26.04.2019 Prof. Dr. Claudia Kemfert

Green Investments of Economic Programms (% Fund, % GDP) Source: Edenhofer, Stern (2009) 26.04.2019 Prof. Dr. Claudia Kemfert

Economic Potentials are huge CO2 free, safe and affordable energy technologies urgently needed Investments in climate protection will strengthen new markets - even in financial crisis Companies which can offer these technologies will have a competitive advantage New emerging markets need to apply (adopt) for climate friendly technologies 26.04.2019 Prof. Dr. Claudia Kemfert

Emerging Climate Markets – Profit Growth Potentials 5 10 15 20 25 30 35 40 Low Carbon Energy Production Energy Efficiency Resource and Material Efficiency Recycling Economy Sustainable Water Industry Sustainable Mobility in % 2030 2007-2009 2004-2006 Source: Roland Berger, DIW 26.04.2019 Prof. Dr. Claudia Kemfert

Prof. Dr. Claudia Kemfert The Challenge Time of cheap energy is over - timing is everything Danger: wait and see - high oil price will harm the economy; climate policy will make fossil fuel more expensive We urgently need CO2 free, save and affordable energy! 25 years for new technology to be adopted Technological breakthrough necessary Competitive advantage: to anticipate fuel scarcity and climate policy (bad example: car industry) Renewable energy is the key 26.04.2019 Prof. Dr. Claudia Kemfert

Potentials for Regions & Cities Green Growth Energy saving improvement buildings (public, private: financial incentives) Renewable Energy, CHP (de-centralized energy production) Pilot programs renewable energy, CHP Sustainable mobility: public transportation, electro mobility, alternative fuels Infrastructure important! Mobility , energy Information and cooperation between local authorities, companies and politicians 26.04.2019 Prof. Dr. Claudia Kemfert

Without Local Authorities the change will not be successful 26.04.2019 Prof. Dr. Claudia Kemfert

We need to solve three crisis Financial Crisis: „Green“ Investments with growth potential instead of short term bonus to salvage 9 year old cars Energy Crisis: Energy Saving, Improvement of Energy Efficiency, Alternatives of Oil and Fossil Fuels Climate Crisis: Mitigation of Greenhouse Gases; Adaptation, international Climate Agreements 26.04.2019 Prof. Dr. Claudia Kemfert

INNOVATION INSTEAD OF DEPRESSION! Thank you very much for your attention! www.claudiakemfert.de 26.04.2019 Prof. Dr. Claudia Kemfert