Development Talks 17 September 2012 After Rio +20: More growth! Thomas Sterner Visiting Chief Economist EDF Professor Environmental Econ Gothenburg.

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Presentation transcript:

Development Talks 17 September 2012 After Rio +20: More growth! Thomas Sterner Visiting Chief Economist EDF Professor Environmental Econ Gothenburg

Is Growth Good ?

Can ”GROWTH” be bad….? Yes: for growth in simple output No: NOT If we mean growth in welfare and if we measure it right! This is environmental Economics.

Just go fast and you’ll get there

The market is great but Does not deal with externalities Does not deal with public goods Does not deal with common property Does not deal with risk and uncertainty Does not deal with assymetric information Does not deal with altruism, love or envy

Is Anything New under the Sun? World Bank and UN workshops Sustainable Development Max social welfare subject to distributional equity Is “GG” just re-packaging? IT IS More, used by (OECD, WB, UNEP, UN RIO+20, Korea) Green growth defined politically, not economically This give us an OPPORTUNITY

Levying carbon tax, promoting low-carbon education proposed Olympic Growth medalists

Growth Threatened

OTHER ENVIRONMENTAL PROBLEMS Biodiversity Spread of Toxic substances Manipulation of N & P cycles Ozone Depletion, Acidification Water, Fish stocks

We can solve these problems Catch shares Water treatment and purification

Climate is special Longrun Stock Global x

CHALMERS CLIMATE CALCULATOR EMISSIONS STOCK OF CTEMPERATURE Christian Azar, Daniel Johansson (Frt) (1 region vs)

STABILIZE EMISSIONS

CUT EMISSIONS 1% FROM 2020

STILL T  2.5 OR 3°

SLASH EMISSIONS 2% IMMEDIATELY

Can we do this or are we doomed?

Amory’s House Amory’s Hypercars Amory’s Vision: Reinventing Fire 0 coal 0 oil, Less Gas; 0 Nuclear No regulations – just smartness: The ”Search for Intelligent Life on Earth”

Ask Me--- I think you can – but it will be difficult: Q=YP - β Emissions rise with income unless prices rise even faster!

Can u ”combine growth & environment”? YES. 5 % growth in Income and 2% DECREASE in emissions ???? EASY: Price of gas has to rise by 9% every year.

All you have to do is get everyone to agree But, everyone does not agree. Taxes not popular Countries divided on goals & means Fairness in allocation looms big

Nigeria abolished fuel subsidy Jan 1

This was what failed in COPenhagen Pretend it does not matter Have ”green growth” ”instead”?

Green Growth will require agreement But plenty to do: Reseach and Education Infrastructure Wind and Solar and Efficiency Agriculture and Forestry Short Lived Climate Forcers Bottom up linking of carbon trading

REMEMBER Taxes to back up those who invest in the new fire. Feebates, road pricing, feed-in tariffs… Utlimately grand deal and carbon price needed.