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 helping build momentum D EVELOPMENT AND C LIMATE C HANGE : World Development Report 2010 Dr. Xiaodong Wang Senior Energy Specialist Stockholm, Sweden February 23, 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

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

B UT TO MEET THE CHALLENGE, WE MUST 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

A CT T OGETHER : D EVELOPING COUNTRIES DOMINATE MUCH OF THE FUTURE ENERGY GROWTH, BUT THEIR ENERGY PER CAPITA REMAINS LOW

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

M AKING IT HAPPEN : L OW - CARBON GROWTH REQUIRES CLIMATE - SMART POLICIES Paradigm shifts in climate-smart development models and sustainable lifestyle Low-carbon cities– compact urban design, public transport, green buildings, clean vehicles, distributed generation Governments can adopt climate-smart domestic policies now to deploy existing technologies: Improve energy efficiency Scale up low-carbon technologies Advanced technologies and innovations are critical to close the remaining gap A low-carbon growth path can be good for development

Policy Tools Energy EfficiencyRenewable Energy 0 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 New Technologies Energy pricing reforms M AKING IT HAPPEN : C LIM ATE SMART POLICIES NEED TO BE TAILORED TO TECHNOLOGIES Abatement potential

M AKING IT HAPPEN : E NERGY POLICIES NEED TO BALANCE FOUR OBJECTIVES : MANY “ WIN - WIN ” OPTIONS, BUT TRADE - OFFS ALSO EXIST Fuel economic growth Increase energy access: negligible impacts on global carbon emissions Enhance energy security: limit price volatility and supply vulnerability from imported oil & gas Improve local and global environment: better public health and lower GHG emissions

M AKING IT HAPPEN : COMMON BUT DIFFERENTIATED RESPONSIBILITIES Low-income Countries Expand energy access Deploy RE/EE whenever least-cost Remove fossil fuel subsidies Leapfrog to new technologies Middle-income countries Scale up RE/EE Promote low-carbon cities Adopt cost recovery pricing Conduct RD&D High-income countries Undertake deep emission cuts at home Put a price on carbon Accelerate RD&D Provide financing and technologies to developing countries

M AKING IT HAPPEN : N EW F INANCIAL RESOURCES Current financing for adaptation and mitigation is $10 billion This is less than 5% of what may be needed by 2030 While the projected financing needs for mitigation alone are large in absolute terms, they represent 0.4 – 0.7% of world GDP over this century Need for massive scaling up to reconcile efficiency and equity It can be done: Mostly a financing challenge Will require all options available

M AKING IT HAPPEN : G REEN INFRASTRUCTURE : AN OPPORTUNITY NOT A BURDEN

New finance, new instruments and new pressures are helping build momentum WDR 2010 SUGGESTS THAT A CLIMATE - SMART WORLD IS POSSIBLE, IF WE … Act now Act together Act differently New finance, instruments and pressures are helping build momentum

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