1. Feasible Climate Targets Richard Richels International Energy Workshop June 17, 2009 Venice, Italy

2. 2 © 2009 Electric Power Research Institute, Inc. All rights reserved. Presentation based on two recent papers by Blanford, Richels and Rutherford 1.“Revised Emissions Growth Projections for China: Why Post-Kyoto Climate Policy Must Look East”, The Harvard Project on International Climate Agreements : Website: www.belfercenter.org/climate 2.“Feasible Climate Targets: the Role of Economic Growth, Coalition Development and Expectations” Energy Economics, forthcoming e-mail: rrichels@epri.com

3. 3 © 2009 Electric Power Research Institute, Inc. All rights reserved. Outline of Presentation Update CO2 emissions in the absence of additional policy Reexamine stabilization scenarios

4. 4 © 2009 Electric Power Research Institute, Inc. All rights reserved. Outline of Presentation Update CO2 emissions in the absence of additional policy –accelerated growth in developing countries

5. 5 © 2009 Electric Power Research Institute, Inc. All rights reserved. Energy-related CO 2 emissions in China

6. 6 © 2009 Electric Power Research Institute, Inc. All rights reserved. 0 1 2 3 4 5 1950196019701980199020002010 Billion tons C Other Non-Annex B India China Annex B Non-Annex B Emissions will surpass Annex B before 2010 Energy-related CO 2

7. 7 © 2009 Electric Power Research Institute, Inc. All rights reserved. Outline of Presentation Update CO2 emissions in the absence of additional policy –accelerated growth in developing countries –impact of current recession

8. 8 © 2009 Electric Power Research Institute, Inc. All rights reserved. Mild and Severe Recession Mild recession = 2 years of zero economic growth globally Severe recession = 5 years of zero economic growth globally

9. 9 © 2009 Electric Power Research Institute, Inc. All rights reserved. Baseline Global CO 2 Emissions to 2100 + Severe Recession (Pessimistic) + Mild Recession (Optimistic) History 0 20 40 60 80 100 120 140 200020202040206020802100 Billion tons CO 2 CCSP Baseline High Economic Growth Low Economic Growth

10. 10 © 2009 Electric Power Research Institute, Inc. All rights reserved. Outline of Presentation Update CO2 emissions in the absence of additional policy –accelerated growth in developing countries –impact of current recession Reexamine stabilization scenarios, in light of –composition of coalition

11. 11 © 2009 Electric Power Research Institute, Inc. All rights reserved. Coalition Countries: Ready to Participate Now Annex B OECD USA Greater EU Japan Canada Aus/NZ Korea Mexico Turkey Russia Ukraine

12. 12 © 2009 Electric Power Research Institute, Inc. All rights reserved. Non-Coalition Countries: Delayed Participation Medium-Term Transition: Brazil Russia India China “BRIC” Group Long-Term Transition: Rest of World - Mid-income countries (e.g. Korea, Mexico) -OPEC countries -Poor countries (e.g. Sub- Saharan Africa) “ROW” Group

13. 13 © 2009 Electric Power Research Institute, Inc. All rights reserved. Non-Coalition emissions are 2x Coalition now (and growing twice as fast) 2007 Global CO 2 Emissions (billion tons) 0 5 10 15 20 25 30 USA Rest of Coalition Brazil India Russia China “BRIC” Group Korea Iran Mexico South Africa Saudi Arabia Indonesia Rest of World

14. 14 © 2009 Electric Power Research Institute, Inc. All rights reserved. Global Coalition BRIC ROW Baseline Total CO 2 Emissions Global Billion tons CO 2 Pessimistic GrowthOptimistic Growth

15. 15 © 2009 Electric Power Research Institute, Inc. All rights reserved. Global Coalition BRIC ROW Baseline Total CO 2 Emissions Coalition Billion tons CO 2 Pessimistic GrowthOptimistic Growth

16. 16 © 2009 Electric Power Research Institute, Inc. All rights reserved. Global BRIC ROW Baseline Total CO 2 Emissions BRIC Billion tons CO 2 Pessimistic GrowthOptimistic Growth Coalition

17. 17 © 2009 Electric Power Research Institute, Inc. All rights reserved. Global BRIC ROW Pessimistic GrowthOptimistic Growth Baseline Total CO 2 Emissions ROW Billion tons CO 2 Coalition

18. 18 © 2009 Electric Power Research Institute, Inc. All rights reserved. Outline of Presentation Update CO2 emissions in the absence of additional policy –accelerated growth in developing countries –impact of current recession Reexamine stabilization scenarios, in light of –composition of coalition –nature of targets

19. 19 © 2009 Electric Power Research Institute, Inc. All rights reserved. Projected Radiative Forcing in 2010 CO 2 CH 4 N2ON2O F-gases (0.02 W/m 2 ) Watts per square meter: Change in heat balance relative to pre-industrial 350 278 450 550 650 400 500 600 300 CO 2 -equivalent concentration in ppmv CO 2 -e Target Levels 2010 Kyoto GHG total is 2.55 W/m 2 = 448 ppmv CO2-e

20. 20 © 2009 Electric Power Research Institute, Inc. All rights reserved. Stabilization Targets Focus on CO 2, but take into account other Kyoto gases Radiative Forcing (W/m 2 ) CO 2 -e Concentration (ppmv) CO 2 -only Concentration (ppmv) 2010 Levels 2.55448392 Target 13.7550465 Target 24.5650540

21. 21 © 2009 Electric Power Research Institute, Inc. All rights reserved. Outline of Presentation Update CO2 emissions in the absence of additional policy –accelerated growth in developing countries –impact of current recession Reexamine stabilization scenarios, in light of –composition of coalition –nature of targets –entry into coalition

22. 22 © 2009 Electric Power Research Institute, Inc. All rights reserved. What is possible, at what cost, if… Coalition countries begin abatement immediately BRIC Group (Brazil, Russia, India, China) begins abatement after 2030 Rest of world (ROW) begins abatement after 2050 MERGE model used to find least-cost stabilization pathway under these constraints

23. 23 © 2009 Electric Power Research Institute, Inc. All rights reserved. Defining Delayed Participation Without anticipation –Developing countries do not plan in advance for future target With anticipation –Developing countries do plan in advance for future target

24. 24 © 2009 Electric Power Research Institute, Inc. All rights reserved. Defining Delayed Participation Billion tons CO 2 China India Russia Brazil 4.5 RF Target 3.7 RF Target Globally optimal path Delay, with anticipation Delay, no anticipation BAU History Globally optimal path Total CO 2 Emissions from BRIC Region (assumes optimistic economic growth) 0 5 10 15 20 25 30 35 1990200020102020203020402050

25. 25 © 2009 Electric Power Research Institute, Inc. All rights reserved. Defining Delayed Participation Without anticipation –Developing countries do not plan in advance for future target

26. 26 © 2009 Electric Power Research Institute, Inc. All rights reserved. Optimal Global Stabilization Pathways 4.5 Target 3.7 Target Optimistic Baseline Coalition BRIC ROW Billion tons CO 2

27. 27 © 2009 Electric Power Research Institute, Inc. All rights reserved. “Locked-in” Emissions from Non- Participants 4.5 Target 3.7 Target Optimistic Baseline Infeasible Coalition BRIC ROW Billion tons CO 2

28. 28 © 2009 Electric Power Research Institute, Inc. All rights reserved. 650 CO 2 -e Target is Possible with Delay 4.5 Target Optimistic Baseline Coalition BRIC ROW Billion tons CO 2 $30 / ton CO 2 in 2020 4% of Gross World Product by 2100

29. 29 © 2009 Electric Power Research Institute, Inc. All rights reserved. Optimal Paths w/ Pessimistic Economic Growth Coalition BRIC ROW Billion tons CO 2 4.5 Target 3.7 Target Pessimistic Baseline

30. 30 © 2009 Electric Power Research Institute, Inc. All rights reserved. Coalition BRIC ROW Billion tons CO 2 4.5 Target 3.7 Target Pessimistic Baseline Now, 550 CO2-e Target is Possible with Delay

31. 31 © 2009 Electric Power Research Institute, Inc. All rights reserved. However, Requires Drastic Action in Coalition Coalition BRIC ROW Billion tons CO 2 4.5 Target 3.7 Target Pessimistic Baseline $430 / ton CO 2 in 2020 7% of Gross World Product by 2060

32. 32 © 2009 Electric Power Research Institute, Inc. All rights reserved. Outline of Presentation Update CO2 emissions in the absence of additional policy –accelerated growth in developing countries –impact of current recession Reexamine stabilization scenarios, in light of –composition of coalition –Nature of targets –entry into coalition –alternative expectations regarding accession

33. 33 © 2009 Electric Power Research Institute, Inc. All rights reserved. What If.. BRIC countries agreed today to join the coalition beginning in 2030 ROW countries agreed today to join the coalition beginning in 2050

34. 34 © 2009 Electric Power Research Institute, Inc. All rights reserved. What is the value of anticipation? Question:

35. 35 © 2009 Electric Power Research Institute, Inc. All rights reserved. Radiative Forcing Target (W/m 2 ) Economic Growth Scenario Savings for Coalition Savings for BRIC 3.7 (550 ppmv CO 2 -e) Pessimistic 51%31% Reduction in GDP Loss with Anticipation of Future Participation Win-Win!

36. 36 © 2009 Electric Power Research Institute, Inc. All rights reserved. Conclusions Surprising Growth in developing countries shifts the dynamics of the stabilization problem Recession has an impact but does not change fundamental realities of the stabilization challenge With delayed participation by developing countries, achieving stabilization at: –650 CO2-e is reasonably possible –550 CO2-e is extremely difficult –450 CO2-e is in the rearview mirror A commitment on the part of the BRICs now to reduce emissions at some date in the future can be a win-win proposition

37. 37 © 2009 Electric Power Research Institute, Inc. All rights reserved. Thank you!

38. 38 © 2009 Electric Power Research Institute, Inc. All rights reserved. Temperature Increase Over Pre-industrial Level 550 CO 2 -e 650 CO 2 -e BAU (optimistic growth) BAU (pessimistic growth)