Some Basic Policy Analytics for

Global Emissions Mitigation

Jeffrey D. SachsUNESCO“Building Green Societies”November 25, 2011

Green Growth Requires Breakthroughs on Five Dimensions:

• Low-Carbon Energy System

• Sustainable Food Supply: Land, Water, Nitrogen

• Urban Sustainability: Pollution, Public Health, Transport

• Population: Rapid Growth, Migration

• Resilience: Climate, Migration, Diversity

I will focus just on the first of these . . .

Basic Relationship:

CO2i = Popi x (GDP/Pop)i x (TPES/GDP)i x (CO2/TPES)i

CO2i is CO2 emissions of country iPop is Country PopulationTPES is Total Primary EnergyGDP is GDP at Purchasing Power Parity

Remarkable Consistency in TPES/GDP:

World 0.19 tons of oil equivalent / $1000 GDPUS 0.19China 0.18France 0.17Japan 0.14Sweden 0.16India 0.15

Differences in CO2/TPES depend on Energy Mix

World 2.39 tons of CO2 per toe US 2.40 China 3.03 (coal based power)France 1.38 (nuclear based power)Japan 2.32Sweden 0.92 (hydro based power)India 2.35

For the World as a Whole Today:

Pop 7 billionGWP/Pop $10,000TPES/GWP 0.20 tons per $1,000 GWPCO2/TPES 2.4 tons per toe

CO2 ≈ 7 x 10 x 0.2 x 2.4

≈ 33.6 giga (billion) tons per year

Each ton of CO2 emitted raises atmospheric

CO2 by around 0.5 tons. Each GT of

atmospheric CO2 raises CO2 concentrations

by around 1/7.81 parts per million (ppm).

Hence, current emissions raise CO2 concentrations

by around 33.6 GT x 0.5 x 1/7.81, which equals:

+2.2 ppm per year

Pre-Industrial Carbon Dioxide = 280 PPM

Current Carbon Dioxide = 390 PPM

Safe Limits: Range is between 350 PPM and 450 PPM

At the current rate of increase, we will reach 450 PPM

By around 2036. In fact, emissions are accelerating.

Global Growth:

Per capita income is rising around 3 percent per year

Population is rising around 1 percent per year

With 0.5 – 1.0 percent per year reduction of TPES/GDP

the rise in TPES is around 3 – 3.5 percent per annum.

Now assume that the rich world grows by

1 percent of GDP per capita per year

The rest of the world catches up with a catch-up

Coefficient of 1.45 (Barro-Lee) [but faster for China, India]

The growth of the rest of the world initially is

3 percent per person or roughly 4 percent total GDP

On these assumptions, Gross World Product is:

$70 trillion in 2010$140 trillion in 2030$250 trillion in 2050

The GWP therefore increases approximately3.6X by mid-century (40 years)

On plausible scenarios, the world must reduceemissions by at least half (to 16 GT per annum)by mid-century. This implies reducing

CO2/GWP by (1/2) * (1/3.6) = (1/7.2)X

Thus, instead of 0.45 tons per $1,000 PPP,we would need 0.06 tons per $1,000 PPP.

Note that no country comes close to this rate today. Sweden is at 0.2, on the low end.

The strategy must be both to:

(1) reduce TPES/GDP (efficiency) and to (2) reduce CO2/TPES (de-carbonization)

De-carbonization may include non-C primary energy and Carbon Capture and Sequestration (CCS).

De-carbonization will tend to accompany a shift fromdirect combustion (ICE, boilers) to electrification (e.g. electric vehicles) and fuel cells (e.g. hydrogen)

Hypothesis:

The World Can Agree to

(1) Converge on low (CO2/GDP) by 2030-2050

(2) Share best technologies

(3) Support low-income countries to achieve

low CO2 energy systems

Note:

I am assuming that we will move beyond

“historical responsibility”

“equal per capita rights”

“compensation”

“single global policy regime” such as cap-and-trade

and instead adopt a convergence framework

Suppose that the world aims to converge

at 0.06 tons per $1,000 GDP. Emissions profiles

would be roughly as follows:

2010 2050 US 6T 1.4TChina 7T 3.0TIndia 1.6T 2.0T

Each Country Commits to Converge on CO2/GDP

Each Country Describes its Profile in four terms:

• CO2/TPES• TPES/GDP • Technology Framework• Policy Framework

Global Green Fund based on Carbon Emissions

Shared Global R&D on EVs, CCS, Renewables, Nuclear

GLOBAL POLICY FRAMEWORK

Global Green Fund

Global Green Fund will fund adjustment by Low-Income Countries.

Global Green Fund will collect CO2 levy on HICs and MICs

Assessment (i) = CO2 Emissions (i) x CO2 Assessment Rate x GDP Factor (i) The Assessment Rate is expressed in $US/tons of CO2

The GDP Factor is as follows: High-income country (>$12,276): 1.0High Middle-income country ($3,976-$12,275): 0.5Low Middle-income country ($1,006-$3975): 0.25Low-income country (<$1,005): 0.0

Illustration of Revenues Raised Globally