Global Climate Change: What Every Executive Should Know Global Energy Services May 2005.

Global Climate Change:What Every Executive Should Know

Global Energy ServicesMay 2005

2Copyright 2005 Global Insight, Inc.

Summary of Major Points

Global Climate Change is a major business and policy issue

Convergence for much of the scientific evidence; controversy still remains on some aspects

“No regrets policy” to implement mitigation programs needed

Viable options are available to address the problem using current technologies

Carefully developed programs can be implemented with minimal economic impacts


Contrary to previous beliefs, there are reasonable mitigation options that can be adopted now without harming the world economy.

While some aspects of the science remain uncertain, the consequences of doing nothing could be severe.

It is clearly prudent to adopt a cost-effective set of carbon reducing measures now.

We are at a Turning Point



What Study Will Provide:

An integrated framework to structure the problem and potential solutions

An update on the state of the art in science A policy assessment model that enables

sensitivity analysis for every key assumption

Assessment of costs and effects of viable mitigation options

Time-phased cost effectiveness curves Well-defined public policy options


Global Climate Change:


Every Executive Needs:

Benefits of Participation

Participate in the public policy debate

Anticipate regulatory changes

Develop enterprise strategies and plans



To Do This, Executives Must Be Fully Informed

Copyright 2005 Global Insight, Inc. 6

About…

Emission Trends, Forecasts, and Drivers

The State of the Science The Effects and Costs of

Mitigation Options Policy Alternatives


The Problem is Not Intractable

Viable Options for Reducing Carbon Emissions

Based on: S. Pacala and R. Socolow, “Stabilization Wedges: Solving the Climate Problem, with Technologies Available Today,” Science, 305, August, 2004, pp 968-972


Transition Targets Must be Established, Such as…

A declining schedule of carbon dioxide emissions

An increasing carbon dioxide tax An increasing schedule of auto

efficiency standards An increasing schedule of

appliance and building efficiency standards

Initial inaction will prevent the attainment of longer-term goals

at reasonable costs



Long-term Gains at Reasonable Costs

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Cost Effectiveness Curves Over time: Significant reductions can be achieved in the long run at reasonable costs, but not in the short run. Steps must be taken now to achieve these long-term reductions.

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Copyright 2005 Global Insight, Inc.

Analytic Framework0

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Analysis Will Be Conducted on a Regional Basis


Using IEA’s World Energy Model Regions

• US and Canada• Mexico• Brazil• Other Latin

America• OECD Europe• Russia• Other Transition

Economies• Africa

• Middle East• China• India• Other South

Asia• OECD Asia• Indonesia• Other East Asia• OECD Oceania

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Possible solutionsPopulation * Leisure * Efficiency * Fuel switching and carbon sequestration

Overview of Policy Assessment Model (Illustrates a single region)

Base case forecast of CO2 emissions(Pop growth) * (GNP/Capita) * (Energy/GNP) * (CO2/Energy)

Target level of CO2 concentration in atmosphereScience * Politics * Technical Feasibility

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Workshops and Agendas

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Interactive Workshops with Key Stakeholders

Workshops will bring together key stakeholders from a diverse group of companies and organizations

Industrial and Manufacturing Utilities and Energy Technology Providers Policy Makers Financial

There will be three parallel workshop tracks

The material for each regional workshop will be available to all groups. Regional workshops will only be held if minimum attendance requirements are met.

Europe North America Asia


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Deliverables

Four Workshops: Global Insight Presentations Discussions with Participants and Experts

Working Papers: Preparatory Materials for Workshop Participation Summaries of Workshop Discussions

Policy Assessment Model: Forecasting Base Cases Forecasting the Effects of Alternative Portfolio of Options

Cost-effectiveness Curves

Public Policy Alternatives

Executive Summary Report

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The Project Team

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2004-2005 – Multiple studies on the Impact of the

EU Emissions Trading Scheme on Participating

Industries

2003 – The Economic Impact on Italy of

Implementing the Kyoto Protocol

2002 – The Economic Impact of Greenhouse Gas

Reductions on Selected EU Countries

2000 – Global Warming: Capital Stock Constraints

on Meeting Near-term Targets

1999 – The Kyoto Protocol: Can Annex B

Countries Meet Their Commitments?

1998 – The Impact of Meeting the Kyoto Protocol

on Energy Marketing and the Economy

1998 – Global Warming: The High Cost of the

Kyoto Protocol National and State Impacts

1997 - Global Warming: The Economic Cost of

Early Action

Drawing from Years of Experience on This Issue

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We Practically Invented the Industry

Consistently Named Among the Top Economic Forecasters in the World

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Expertise Built Upon a Solid Foundation

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For Additional Information …

Gil Rodgers, Senior Director

Global Insight, Lexington, MA

781-301-9142

[email protected]

Peter Seager, Principal

Global Insight, London

+44 20 8544 7924

[email protected]

Global Climate Change: What Every Executive Should Know Global Energy Services May 2005.

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