World warming up to no-regrets green policies

CLIMATE change argues for a close integration of mitigation and adaptation plans into development thinking.

What requires attention is how countries can rally their resources towards policies that produce co-benefits for economic growth and easing global warming.

The Asia-Pacific region, home to a large number of developing economies and small island developing states, is in a particularly precarious situation.

Governments need to be keenly aware of the risks and vulnerabilities they are expected to deal with, and in some cases already facing.

Increasingly, policy measures to counter climate change are exacerbating socio-economic risks, for instance the impact of aggressive biofuels production on food security.

This calls for cautious and informed policy-making for it is amply clear that neither development, nor climate mitigation and adaptation, can be sacrificed at the altar of the other.

A recent major policy initiative that seeks to mainstream climate change mitigation into development policy has been South Korea’s “green growth” strategy unveiled in 2008. The government aims to invest 2 trillion won ($2.7 billion) in the next five years to advance green energy, and to capture 13 percent of the green energy global market by 2030.

According to some estimates, the green energy industry in South Korea will create about 950,000 new jobs by 2030.

Another example is the way energy reforms meet development objectives, like ensuring the poor’s access to electricity while prioritizing low-carbon, renewable energy. Developing countries have more than 40 percent of existing renewable energy, including 70 percent of solar hot water capacity and 45 percent of biofuel production.

Truly, the challenge of addressing the twin concerns of climate and development confronts policy makers.

The cost

Technology is a key component of the strategy to decouple energy intensity and development, and can help enable a future where energy needs and climate concerns are addressed simultaneously.

Many technologies that have the potential to provide solutions for low-carbon development are already available, though several are not yet economically competitive.

Technology transfer has failed to kick-start and government needs to play the role of the initiator and the catalyst.

This is particularly relevant for clean coal technologies, and solar thermal and photovoltaics. The deployment of photovoltaics in developing countries is often constrained by large costs, but recent developments allow for reduction of per unit cost of solar power.

A conducive policy environment is vital for low-carbon technologies. Through targeted policy initiative and enabling favorable conditions for research and development for low-carbon technologies, the output in Japan’s industrial sector nearly tripled between 1973 to the present—but kept its energy consumption roughly flat.

Funds for mitigation remain an important challenge. In 2030, macro-economic costs are estimated from a 3-percent decrease of global gross domestic product to a small increase.

Oxfam International estimates poor countries will need at least $50 billion a year to support adaptation measures if current emission rates are to be stabilized.

Windows

The ongoing financial crisis affects not only the overall availability of funds for climate adaptation and mitigation, but also on reduced expenditure on R&D in clean energy technologies.

Despite this, there are several opportunities to integrate climate policy into mainstream economic policy, and it is crucial to ensure that policy-makers make a conscious effort to maximize and use these opportunities.

The United States stimulus package, for instance, contains provisos for federal “green buildings” and funding for renewable energy projects. According to a study by ICF International, the $838-billion package would deliver a minimum greenhouse gas savings of 61 metric tons per year, and could result in deeper emission cuts.

The February 2009 “A Climate for Recovery” report by HSBC analyzes 20 economic recovery plans, and estimates that about 15 percent of the $2.8 trillion initiatives can be associated with investments consistent with easing climate change.

China’s $221-billion stimulus plan involves the largest outlay for such investments, with South Korea ranking the first in the largest percentage (81 percent) of “green” investments.

The growing concern over climate change has ensured that climate concerns have made inroads into development policy.

These indicate the various opportunities available for no-regrets mitigation policies.

Global Policy Challenges: climate change and sustainable development, ADB