take quantified emission reduction quotas at the Copenhagen conference, because this country is still at an early stage of development.”
Even if all these points could be set aside, immediate carbon cuts have a final, fatal flaw: they will cost much more than the expected damage of global warming.
In July, leaders of the world’s major industrialized nations—the Group of Eight—agreed that they would strive to make carbon emissioncuts to limit global warming to no more than 2°C above preindustrial levels. This would be the most costly public policy ever enacted
as by heat extremes that take a toll on agriculture and human health.
Southeast Asian governments, acutely aware of the magnitude of the threat, have pledged to reduce emissions. They also recognize the need to move toward low-carbon developmental strategies. ASEAN leaders approved a plan that targets a 23 percent share of renewables in the region’s energy mix by 2025, up from 10 percent in 2015. The need to curb deforestation also figures prominently in national and regional policy agendas.
Yet, promised emissioncuts are partly or wholly conditional on
needs for public investment for adapting to climate change and responding to natural disasters amount to about US$25 billion per year (1.1 percent of annual GDP on average). 10 Deep emissioncuts to contain global warming to 2°C would require an increase of global energy infrastructure investment by 0.3–0.6 percent of GDP per year on average over the next two decades, with the share of low-carbon energy supply rising from 40 percent in 2020 to 80 percent in 2050. 11
But there is a growing evidence that investing in resilient infrastructure pays off over time and
Countries are increasingly committing to midcentury ‘net-zero’ emissions targets under the Paris Agreement, but limiting global warming to 1.5 to 2°C requires cutting emissions by a quarter to a half in this decade. Making sufficient progress to stabilizing the climate therefore requires ratcheting up near-term mitigation action but doing so among 195 parties simultaneously is proving challenging. Reinforcing the Paris Agreement with an international carbon price floor (ICPF) could jump-start emissions reductions through substantive policy action, while circumventing emerging pressure for border carbon adjustments. The ICPF has two elements: (1) a small number of key large-emitting countries, and (2) the minimum carbon price each commits to implement. The arrangement can be pragmatically designed to accommodate equity considerations and emissions-equivalent alternatives to carbon pricing. The paper discusses the rationale for an ICPF, considers design issues, compares it with alternative global regimes, and quantifies its impacts.
cars increases, the aggregate cost of the VAT exemptions would also grow (eventually roughly doubling under current policies, when all new vehicle purchases are EVs) in the absence of any policy reform.
25. However, the costs of Norway’s tax incentives are high relative to the direct environmental benefits, at least when compared to some other climate mitigation programs . Specifically, the implied fiscal costs of the VAT exemptions per ton of CO2 emissioncuts are in the range of USD 710 in 2019, which is high relative to the estimated costs of cutting CO2
This Note prepared for the G20 Infrastructure Working Group summarizes the main finding of the IMF flagships regarding the role of environmentally sustainable investment for the recovery. It emphasizes that environmentally sustainable investment is an important enabler for a resilient greener, and inclusive recovery—it creates jobs, spurs economic growth, addresses climate change, and improves the quality of life. It can also stimulate much needed private sector greener and resilient investment.
Valentina Bosetti, Carlo Carraro, Sergey Paltsev, and John Reilly
Different Climate Stabilization Targets
Stabilization of GHG concentrations at levels often discussed in international negotiations would require very substantial emissionscuts. As indicated in Figure 3.2 , some of the more stringent targets are already exceeded or will be exceeded in the not-so-distant future. In particular, the 450 CO 2 -e target for the Kyoto Protocol gases (consistent with keeping mean projected warming above preindustrial levels to approximately 2° C) is about to be passed.
Figure 3.2. Relationship between Different CO 2 -e Concentration
Ms. Era Dabla-Norris, Mr. James Daniel, Mr. Masahiro Nozaki, Cristian Alonso, Vybhavi Balasundharam, Mr. Matthieu Bellon, Chuling Chen, David Corvino, and Mr. Joey Kilpatrick
by 2030 and to cut emissions per unit of GDP by 60–65% of 2005 levels by 2030, potentially putting it on course to peak by 2027.
An unconditional 10% emissionscut by 2030, compared to business-as-usual levels, or a conditional 30% reduction with international support. Applies to energy emissions only. As part of the target, reduce domestic maritime shipping emissions by 40% by 2030 and aim for carbon neutrality by 2050. Includes adaptation policies.
A 33–35% reduction in emissions intensity by 2030, compared to 2005 levels. Also pledges
International Monetary Fund. Communications Department
This paper discusses that from shifting demographics to climate change, Southeast Asia confronts a host of challenges. Summoning them will require both resilience and flexibility. Advances in artificial intelligence, including robotics, together with innovations such as 3-D printing and new composite materials, will transform manufacturing processes, making them less labor-intensive while creating opportunities for new products. This will enable new ways of making things and change the drivers of competitiveness. There will be indirect effects as well. For example, aircraft manufacturers, taking advantage of new composite materials such as carbon fibers, have developed a class of superlong-haul aircraft that could bring more tourists to Southeast Asia as relatively cheap point-to-point travel options emerge. The region should still enjoy synergies from globalization and other modes of economic integration, but the form and shape of such integration could change. For Southeast Asia, the next couple of decades could prove exhilarating in terms of the opportunities presented by technology and global growth, but also tumultuous because of the continuing risks, such as those posed by an unreformed and unstable international financial architecture. There clearly is much hard work to be done. Policymakers still have not gotten everything right, but they are heading in the right direction.