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TEMTI NewsletterTheme on the Environment, Macoeconomics, Trade and Investment

MAY 7, 2023 TEMTI NEWSLETTER

https://www.iucn.org/

IUCN Commission on Environmental,

Economic and Social Policy

(CEESP)

Email to: [email protected]

TEMTI’s mandate is to provide practical and enabling information, as well as relevant policy options on issues lying at the intersection between economics and environmental and social sustainability.

Visit TEMTI’s website

ContentsMessage from the Commission Chair of CEESPMessage from TEMTI ChairActivities and News from TEMTI MembersCommentary: CoP21: emerging framework and closing windowsForthcoming eventsEPGS Series

ObituaryTEMTI regrets to announce the sad news of Professor Sam Moyo's death in New Delhi last Saturday. A few days before this Newsletter was finalized, we learned the tragic news of Professor Sam Moyo's death in a traffic accident in New Delhi. Sam was the director of the African Institute of Agrarian Studies in Zimbabwe and had been attending a conference at Jawaharlal Nehru University in New Delhi. Everyone who knew him agrees that he was a giant thinker and a powerful advocate of social justice. I met Sam when he came to lecture in Durban at the OSISA Winter School for Economic Justice in 2013. I remember I took notes during his two lectures, like every student, because in the final analysis, when it came to Sam, we were all his students. I was impressed by the depth of his thought and his analytical approach and I learned so much about the role of colonization in Europe's capital accumulation that I still consider my experience a rare luxury for a Latin American economist.

But there was something else with Sam Moyo. He was a humble person, never one to think arrogantly or to use his intellectual authority to impress others. He was a fine example of a classic gentleman and I only regret I didn't have the opportunity to work more with him. He was a key member of TEMTI and we will miss him dearly, for he was the best example of the way in which knowledge and scientific responsibility can blend with a deep commitment for social justice.

Alejandro Nadal

Chair, TEMTI

MAY 7, 2023 TEMTI NEWSLETTER P. 2

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Planet at the crossroads

“We live in a time of tremendous change, the

nature and extent of which is the subject of intense

debate around the world. At the heart of this debate is the clash of immediate human needs with their

long-term impacts on the planet’s capacity to support

life.”

TEMTI’s Working Paper Series:

Economic Perspectives on Global Sustainability

Message from the Commission Chair of CEESP

Kia Ora members of the CEESP Theme on the Environment, Macroeconomics, Trade and Investment (TEMTI). Thank you for your interest and contribution to the work of the Theme. TEMTI plays an important role in the overall work of the Commission as it covers the third pillar of sustainable development, economics, which is too often overlooked in conservation and environment policies. Your contribution to CEESP’s endeavours allows us to analyse with rigour both the economic dynamics of sustainable development, as well as new avenues for policymaking.

Both TEMTI and CEESP remain committed to the vision of a world where equity is at the root of a dynamic harmony between humankind and nature, as well as among peoples. This vision involves a world of diversity, productivity and integrity of natural systems where production and consumption are sustainable and where cultural diversity is intertwined with biological diversity capable of generating abundant and sustainable livelihoods.

The Steering Committee of CEESP has just finished drafting the new mandate for the Commission. This will be sent to you soon for comment. As well as retaining analysis of economic drivers of environmental policies, one of the new areas CEESP intends to devote attention to is examining diverse values and valuations of nature. Within this area approaches such as Natural Capital and market-based responses to climate change will be explored as well as the social, environmental and economic assumptions that underpin them.

The future work of TEMTI will continue to be vital in ensuring that CEESP provides a balanced, environmentally and socially responsible approach to sustainable development

I look forward to meeting as many of you as possible at the World Conservation Congress. CEESP will be holding a CEESP members meeting on September 1st so please note the date.

Thank you again for your contribution to the expertise of the Commission.

Aroha Te Pareake MeadChairIUCN Commission on Environmental, Economic and Social Policy (CEESP)







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Message from TEMTI Chair

In the 87th IUCN Council meeting in Haikou, province of Hainan, China, I had the privilege to give a talk on our work on the economic drivers of environmental degradation. Here are some highlights of that presentation.

In recent years, a number of organizations and publications have mentioned economic growth and population dynamics as the main drivers of environmental degradation (UNEP 2007 and 2012; IPCC 2007 and 2014; UN 2012; IPBES 2015). But these are very general categories that encompass a multitude of different types of events, in differing scales and with very dissimilar transmission chains. Thus, there is a clear need to unbundle this discussion about economic drivers.

Economic growth does translate into an increment of production and consumption of goods and services and, from this point of view it does have implications for the use of natural resources or for the way the economy impacts the environment. But growth is not a harmonious and uniform process. It has different rates between sectors (and at a more disaggregated level, between branches) in an economy and between regions. It is not a steady process and economic history shows that growth rates vary radically in time. For example, between 1945-1975 the average yearly growth rate of the world economy was 5.7%. In the period 1975-2000 that rate was almost cut in half. Today the world economy has slowed down as a result of the global financial and economic crisis.

The global economy has started to rely more and more on periodic episodes of asset inflation (commonly known as 'bubbles'). But these episodes lead to chronic crises that bring about serious disruptions in economic structures: inequality, bankruptcies and fiscal deficits. Today the world economy may be facing a future of secular stagnation or, in the best scenarios, under par growth. A high level of unemployment for the near future is a regular forecast today. The scars left on public accounts will have important fiscal policy implications for years to come. How will this affect the footprint that economic growth leaves on the environment? It's hard to tell, but one thing is clear: a crisis and its aftermath of a stagnant economy does not necessarily spell good news for the environment.

Population growth is the other factor frequently mentioned as key driver of environmental degradation. There is no doubt that the prospect of having a total population of 9 billion by 2050 is something that should retain our attention. But there are also some interesting facts that need to be taken into account when thinking of population as a driver of environmental degradation. For example, most countries/regions have entered or are entering their demographic transitions. Global population growth rate peaked in 1963 and has been declining ever since: 1.2% today but probably be <1% in 2020 and <0.5% by 2050. Perhaps the main demographic phenomenon today is urbanization and has critical implication for consumption patterns and markets. International migration is without a doubt the second most important demographic event.


IUCN Commission on Environmental, Economic and Social Policy (CEESP)




The Political Economy of Africa’s natural resources and the ‘Great Financial Crisis’, by Bram Büscher

Demand for more goods and services is of course the implicit element when talking about population growth as a driver. But here we need to take into account that demand and the formation of preferences is not a static or rigid structure that remains unaffected by marketing and a myriad other forces. The concept of endogenous preferences is highly relevant here. In addition, there are deep disparities in the use and access to raw materials: per capita consumption of raw materials in OECD countries is 18-20 times more than in developing countries.

The key message here is that both economic growth and population dynamics need to be examined in disaggregated terms. These categories involve a complex set of disparate forces that work in different dimensions. There is a clear need to disaggregate and examine these dimensions in detail. Unbundling these categories will allow us to refine our vision on the nature of the drivers and the ways to control them in the context of robust conservation strategies. Using adequate analytical instruments is an essential requisite in the study of economic drivers of environmental degradation.

The work of our colleagues in the TEMTI network is an important contribution to the research agenda on economic drivers. Our analysis of the economic forces behind the degradation of the environment is a key element for the design of better and more resilient conservation strategies, as well as for the development of policy alternatives.

Alejandro Nadal

Centro de Estudios Económicos, El Colegio de México

Chair of TEMTI

References

IPBES (2015), “The IPBES Conceptual Framework: Connecting Nature and People”, Current Opinion in Environmental Sustainability, Vol. 14 . ScienceDirect.com

IPCC (2007), Fourth Assessment Report. Intergovernmental Panel on Climate Change. Geneva, Switzerland. Available at: www.ipcc.ch

IPCC (2013), Fifth Assessment Report. Intergovernmental Panel on Climate Change. Geneva, Switzerland. Available at: www.ipcc.org

MEA (2003), Millennium Ecoystem Assessment: A Framework for Assessment. Island Press. Available at: http://www.millenniumassessment.org/en/Framework.html

UN (2012), The Future We Want. Outcome Document of the Rio+20 ConferenceUNEP (2007), Global Environmental Outlook 4. Environment for Development. United

Nations Environment Programme. Available at: http://www.unep.org/geo/geo4.asp

UNEP (2012), Global Environmental Outlook 5. Environment for the Future We Want. United Nations Environment Programme. Available at: http://www.unep.org/geo/geo5.asp


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Activities and News from TEMTI Members

Recent activities by TEMTI members reflect the priorities and new developments in our network. The following examples of work in research, consultancy and advocacy by new and old members of our team illustrate the wide array of fields we are covering today. We welcome those new members that share our enthusiasm and eagerness to further develop TEMTI's priorities.

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TEMTI sends a message of sympathy and solidarity to Sam Moyo’s colleagues and friends at the African Institute for Agrarian Studies (AIAS), of which he was Executive Director. AIAS is an independent policy research institution committed to the development of agrarian systems that enhance equitable land rights and sustainable land uses throughout Africa. AIAS does research based policy mediation and advocacy through five core strategies: research, policy dialogues, training, information dissemination and networking.

AIAS has been active in the producing policy documents, training courses and policy dialogues in Zimbabwe and the region as a whole. The institute also hosts the Agrarian South Network and edits the Agrarian South: Journal of Political Economy (www.ags.sagepub.com).

AIAS launched a Call for submissions for its VIII Agrarian South Summer School – 2016, “Progressive Social Forces, Social Movements and Collective Actions in the Contemporary Agrarian Transformations in the South.” The aim of the Summer School, to be held in January 18 to 22, 2016 in Harare, Zimbabwe, is to bring together a variety of social forces that have been able to challenge and influence processes of land and agrarian reforms and transformations in the South.

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Leontief Prize to Amit Badhuri

TEMTI congratulates Amit Badhuri for receiveing the 2016 Leontief Prize for Advancing the Frontiers of Economic Thought, awarded by the Global Development and Environment Institute (GDAE, Tufts University). This year's award (shared with Diane Elson), is titled "Development and Equity," recognizes the contributions that these researchers have made to economic understandings of development, power, gender, and human rights.

“As the free market and waves of globalization have left some peoples behind, Diane Elson and Amit Bhaduri demonstrate why the current theories of development have excluded the poor and disenfranchised from the growth process,” said GDAE Co-Director Neva Goodwin. “Their cross-disciplinary work and profound understanding of economic development is appropriately recognized in an award that bears Leontief's

http://www.aiastrust.org/index.php/upcoming.html

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GDAE awards the Leontief Prize each year to leading theorists who have developed innovative work in economics that addresses contemporary realities and supports just and sustainable societies. This year’s award will celebrate their continuing efforts to expand our knowledge of economic systems in the contexts of globalization capital accumulation and the shifting balance of power away from governments to markets. The ceremony and lectures by the awardees will take place on March 102016 on Tufts University’s Medford campus.

Amit Badhuri is Professor Emeritus at Jawaharlal Nehru University, Delhi, and is currently the Visiting Chair Professor in Political Economy at Goa University. He has served as Professor of Political Economy at the University of Pavia, Italy, Reader at the Delhi School of Economics, and Professor at the Indian Institute of Management, Calcutta. Dr. Bhaduri’s research spans several important fields including capital and growth theory, Keynesian and Post-Keynesian macroeconomics, and development economics. He has published more than 60 papers and has written ten books.

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Patrick Bond , is Professor of Political Economy, University of the Witwatersrand Professor of Development Studies, University of KwaZulu-Natal. In a special issue of the Journal of World-Systems Research this year, he scrutinizes the question of whether climate activism from below can transcend the negotiators’s paralysis above (here the pdf).

Also this year, this time on a special issue on sustainability (Interdisciplina, Vol. 3 No. 7, 2015), Patrick analyses how the different social movements of resistance to extractivism in South Africa remain fragmented, despite all being dedicated to sustainability. He argues that tackling social, economic, political and ecological factors with a more explicit structuralist critique can be useful to articulate the diversity of movements by providing broader visions and narratives of political, economic, and ecological change.

Patrick’s most recent book, co-edited with Ana García is BRICS: An Anti-Capitalist Critique, London, Pluto Press; Chicago, Haymarket Press; Johannesburg, Jacana Press; and Delhi, Aakar Press, 2015.

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Bram Büscher is Professor and Chair of the Department of Sociology of Development and Change at Wageningen University in The Netherlands. He does research on the links between global capitalism and conservation, environment, and energy issues. In his most recent projects he has investigated the relation between new online (social) media and the worrying new levels of violence and conflict in relation to spaces where the conservation-extract-wildlife crime nexus is intensifying (especially in South

http://www.revistas.unam.mx/index.php/inter/issue/view/4093/showToc

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Africa, Brazil and Indonesia).

Bram is the author of Transforming the Frontier. Peace Parks and the Politics of Neoliberal Conservation in Southern Africa (Duke University Press, 2013). He is also the co-editor of The Ecotourism / Extraction Nexus: Rural Realities and Political Economies of (un)Comfortable Bedfellows (Routledge, 2013, co-edited with Veronica Davidov) and Nature Inc: Environmental Conservation in the Neoliberal Age (University of Arizona Press, 2014, co-edited with Wolfram Dressler and Robert Fletcher). Since 2012, Bram is one of the editors of the open-access journal Conservation & Society (www.conservationandsociety.org) and a book series with the University of Arizona Press on Critical Green Engagements: investigating the Green Economy and its Alternatives.







life.”


Julio Contreras works at the Association of Agricultural Development & Business Yanapay (ADAE Yanapay), an institution aiming at eradicating poverty, gender differences and environmental problems in rural areas in southern Peru.

This year, Julio was appointed as the manager to the management committees in two protected areas of the city of Arequipa (Reserva Paisajística de la Subcuenca de Cotahuasi y Reserva Nacional de Salinas y Aguada Blanca). The committees seek to strengthen the economy of rural communities living within protected areas.

“We train and provide technical assistance in activities such as: raising llamas and alpacas, cattle, textile, crafts, tourism and aquaculture. Of course the bottleneck is marketing, but our proposal includes the insertion of products (raw and value-added material) platforms promotion (virtual and fairs), with some groups have managed to reach the export (with associations), but with the communities we are still in the early stages,” says Julio in a letter to TEMTI.

Partnering with over 30 community producers associations, ADAE Yanapay applies and develops an organizational strengthening program that works to improve the quality of life of rural communities promoting their most important economic activities in a socially and environmentally sustainable way.

According to ADAE Yanapay, “the strategies that develop from within these highly committed organizations are the only ones that can be successfully adapted to the local conditions and get the peoples’ support. Only those strategies can offer a sustainable response in the fight against poverty in Peru.”

Visit ADAE Yanapay’s website: www.adaeyanapay.org.

***

Warren G. Lavey is Adjunct Professor at the University of Illinois and a Consultant on environmentally preferred purchasing to the U.S. General Services Administration, U.S. Environmental Protection Agency, and the State of Illinois. He’s recently

http://www.adaeyanapay.org/

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developed university courses on legal protections for natural areas, climate change and public health, and monitoring and evaluating sustainability projects.

In a recent article to the Conservation Finance Alliance (co-authored with Stephanie Lavey), Warren examines how environmentally preferred purchasing can signal rising opportunities for conservation financing, and provides examples on three developments: 1) customers in many markets can find vendors financing sustainable management of natural resources; 2) some manufacturers and retailers are leaders in sustainable purchasing as they reduce their indirect (supply chain) emissions and use of natural resources; and 3) purchasers have growing access to sustainability analytics, metrics, certifications and guidance. Greater efforts are however necessary to capture the potential benefits of purchasers’ selective spending. Two steps towards more customer-driven conservation financing involve enforcement and prioritization.

Warren can be contacted at: [email protected].



http://conservationfinance.org/news.php?id=301




Economic Perspectives on Global

Sustainability

Effectiveness of clean coal technologies in global carbon emission mitigation: evidence and summary, by Oluwasola E. Omoju

Oxford Adaptation Academy

Last August was the 6th edition of the Oxford Adaptation Academy. This is an intense three weeks training space aimed to help practitioners, professionals and government officials to understand the challenges of climate change adaptation and develop skills required to make sound decisions under uncertainty.

Claudia Múnera (CEESP Member) took part in this space, alongside with participants from different parts of the world, backgrounds and organizations including the UNFCC, NGO’s, and government officials.

The Adaptation Academy is a collaborative effort between the Global Climate Adaptation Partnership (GCAP) and the Smith School of Enterprise and the Environment at The University of Oxford.

Its aim was to learn more about all the complex social, environmental and economic issues interlinked with the climate change adaptation challenges that affect the decision making process. The academy made an emphasis in looking for collaborative approaches to implementation, and understand the role of private sectors and markets as important players in the adaptation arena.

The main themes of the academy include: understand our role as change makers both in our own careers and organizations, see adaptation as a process linking climate science, vulnerability and decision making, and provide participants with technical skills to analyze the adaptation options and project development.

Next year the academy will be held again in August. For more details on the academy contact Lesley Downing ([email protected]). Claudia Múnera can be contacted at: [email protected] // [email protected]

New Members

TEMTI welcomes Prof. Philip M. Fearnside to the network. Fearnside is a Research Professor in the Department of Environmental Dynamics at the National Institute for Research in Amazonia (INPA) in Manaus, Amazonas, Brazil. He is a permanent resident in Brazil where he has lived in Amazonia for 39 years doing ecological research. In addition to Latin America, he has field experience and publications include India, Indonesia, China. He completed his Ph.D. in 1978 in the Department of Ecology and Evolutionary Biology, Division of Biological Sciences, University of Michigan, Ann Arbor, Michigan.

Fearnside's research since 1974 has been directed at the estimation of human carrying capacity of tropical agro-ecosystems. His work since 1985 has been organized around the objective of converting the environmental services of Amazonian forests into a basis for sustainable development for the rural population of the region, taking the place of the current pattern of forest destruction. He has authored over 500 professional publications and over 250 popular and outreach publications on these and related problems of environment and development. He also spreads these messages through extensive public speaking, having delivered over








850 speeches.

Honors include Brazil's National Ecology Prize, the UN Global 500 award, the Conrad Wessel prize, the Chico Mendes prize, the Scopus prize (from Elsevier & CAPES) and membership in the Brazilian Academy of Sciences. In 2006 he was identified by Thompson-ISI as the world’s second most-cited scientist on the subject of global warming. In 2011 he was identified as the world’s 7th most-cited scientist in the area of sustainable development.

Philip’s papers are available at http://philip.inpa.gov.br.







life.”


Economic Perspectives on

***

TEMTI warmly welcomes Carolina Aragon (Mexico City, 1988) as TEMTI’s online community manager. Carolina is a Biologist by National Autonomous University of Mexico. Her focus is on science communication through digital media. Her experience in digital media encompasses the areas of social media management and public relations, web user experience and performance analysis and enhancement. Carolina is certified by Google in Analytics and AdWords.

Follows us @IUCN_TEMTI

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Commentary

COP 21: emerging framework and closing windows

Francisco Aguayo (UNU-MERIT)

As a new round of negotiations of the UNFCC approaches, optimistic expectations about a climate deal glitter across the media. The main details of the agreement to be discussed at the Conference of the Parties (CoP) in Paris this December are yet to be defined. According to agreement’s draft, neither the framework that determines national commitments, nor the main economic tools to curb emissions will likely change. From this perspective, and despite important shifts in the political environment, the agreement will most likely fall short of producing an effective framework to stop dangerous warming.

The geist of hope surrounding the Paris CoP comes from the policy change in major producers of greenhouse gases (GHG), U.S. and China. In particular, the secular reluctance of the U.S. to align mitigation goals with the rest of industrialized countries appears to have receded. But these advances appear as minor steps when assessed against required action.

Distant goals, weak roles

The CoP 16 in Cancun (Mexico) agreed to limit global warming to +2°C, which means that additional emissions along the century should remain between 800 to 1,000 GtCO2 (see Friedlingstein et al., 2014; Raupach et al., 2014). While this constraint at current emission rates is already challenging, one must not overlook the fact that the energy supply

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http://dx.doi.org/10.1007/s11192-011-0533-4

http://esi-topics.com/gwarm2006/interviews/PhilipFearnside.html

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Global Sustainability

infrastructure already in place will use up 50% of the remaining space (Raupach et al., 2014). The agreement leaves open the possibility of revising down the target if new scientific evidence indicates the need to reduce acceptable warming levels, which some studies indicate s already the case (Hansen, et al., 2008, and Lenton et al., 2008, Hansen et al., 2013). Hansen et al. (2013) for example argue that, due to slow feedback effects not included in IPCC climate models, an additional 1,000 GtCO2 would guarantee incontrolable warming. The window of opportunity for avoiding dangerous damage and increasing adaptation costs is thus rapidly closing.

In contrast, global emissions’ levels accelerated all the way through the 1990’s and the 2000’s, in line with high-warming pathways leading to +4°C to +6°C in IPCC models. Shifting emissions off that track and keeping climate change to +2°C (which may not be enough) requires to reduce current global emissions by 40% to 70% by 2050, with respect to the year 2010 levels, and reach near zero emissions by 2100 (IPCC, 2014, p. 82).






Up to now, there is no agreement as to how the remaining athmospheric space is going be shared among nations. The safer emission reduction pathways, considering the principle of shared but differentiated responsibility (using historical responsibility) indicate that poorer nations must peak emissions around 2025 and reduce them at rates of 6%-8% per year, while richer nations require much faster reduction rates (at least 10% a year) to reduce emissions by 70% to 2025 and by 90% to 2050. The lack of clear rules for determining national responsibilities adds uncertainty to the outcome of climate action within that shrinking window.

Intended Nationally Determined Contributions (INDCs) are a poor substitute of effective commitments, as long as they remain detached from physical constraints of the climate system. At their current levels, INDCs are insufficient for keeping warming at +2°C (OECD, and Climate Analytics). Negotiations have failed to deliver rules for national contributions that consider historical responsibility, equity and capability in determining national responsibilities, which could contribute to a more robust agreement (see Baer, Athanasiou, Fieldman and Kharta, 2008). The risk of trespassing dangerous warming will grow continuously unless both the level of commitment and actual GHG mitigation accelerate, which is less likely without a robust framework at the national level. The outcomes of the Paris CoP must be measured and assessed along this line.

Economic instruments: weak mitigation drivers

The other main issue is the nature of policy tools and mitigation mechanisms. The Flexible Mechanisms (carbon pricing schemes, clean development mechanisms, joint implementation, and REDD+) will likely be preserved in their current shape. These tools were implemented with the intention of harnessing market forces to work in favor of de-carbonization. Evidence from the last decade shows that these tools are still a long way from inducing de-carbonization at the required scale, much less of producing accelerated mitigation.

The main flexible mechanism is carbon trading. Emission trading schemes have quickly developed in the last decade, expanding in 40 countries and regions to cover up to 12% of energy-related GHG emissions (World Bank, 2014). Recall that carbon markets consist of a cap (an initial set of emission allowances) and a trading system (that allows firms to buy and sell allowances to meet their quotas). Trade would allow participants to meet their quotas at the lowest cost. Finally, the cap should be adusted progressively in order to make prices closer to the true emission cost. In average, prices in trading schemes have remain around $7-12 USD per ton of carbon (World Bank, 2014), a long way below the most conservative estimations of social costs of carbon, which range form $21 (EPA) to $83 (UK’s Department of Energy and Climate Change). More effective carbon pricing would need to be closer to more realistic social carbon costs in the order of $28-$893 (Ackerman and Stanton, 2010) or to abatement costs (required for achieving zero emissions by 2100), which range between $150-$500. Carbon pricing is also completely at odds with other economic policies. Subsidies to fossil fuels alone amount to $115 USD/ton, covering 13% of energy related emissions (IEA, 2013).





IUCN Commissionon Environmental,


(CEESP)





Resolving the Food Crisis: Assessing

Global Policy Reforms since 2007, by Tim Wise and Sophia

Murphy

The reasons behind low prices are not accidental but rather a result of major design flaw of offset markets (Lohman, 2006). A first problem is that adjusting the cap is extremely difficult. For example, current surplus allowances in the European Emissions Trading System (EU ETS) amount to 2.1 billion tCO2. Excess initial supply of allowances (offered at no cost during the first two rounds of the market) has now combined with falling energy demand a result of the crisis, inflating allowance surplus from the demand side. The EU ETS has planned to delay the supply of 800 million tCO2 in the 2014 allowances, hoping to increase short-run scarcity and increase prices, but without actually adjusting the cap. There may be another 1.5 billion tons of “hot air” (excess permits) in non-ETS sector allowances (transport, agriculture, housing, and waste) in the EU’s Effort Sharing Decision (2013-2020).

The second problem with emission trading schemes is they lack an in-built correction mechanism that adjusts the cap to potential emission reductions. If mitigation accelerates, e.g by the adoption of low-carbon technologies, the supply of allowances will increase, thus reducing the price of carbon. Trading hinders the stimulus to innovation on both ends of the market, reducing gains to sellers and costs-savings to buyers. These flaws further support the proposition of a global carbon fee as a base for internalizing carbon costs (Hansen et al., 2013).

Physical and financial lock-in

It is true that fossil fuels are “cheaper” because their negative effects is not paid for, and because they receive subsidies. But it is key to understand as well that they are locked-in in our current socio-economic structures (Unruh, 2000). The lock-in effect means that, despite the fact that negative effects and cost-effective alternatives are known, the prevalence of fossil fuels is is perpetuated by the self-reinforcing technologial, and socio-economic effects: interdependence and network economies, institutional structures like performance standards and users’ preferences, and political leverage that biases choices and extends privileges. An ordered transition to low-carbon energy requires not only adequate energy prices and taxes, funding, and incentives, but also aligned policies and rules, coupled with coordinated, long-term investments all across the energy system (Grübler at al, 2012).

There are many aspects of this transition that deserve attention, including broader sustainability issues, the extent and depth of the global economic crisis, as well as fundamental aspects of climate justice. But one critical aspect, completely unattended by the current climate framework is the role of financial markets. Climate stabilization thus implies then that that 60% to 80% of ready available fossil fuel reserves (2,860 Gt CO2) must stay in the ground. Along the last decade, financial derivatives like futures and options channelled massive resources into non-conventional fossil fuels’ infrastructure, hand in hand with the commodity “super-cycle.” The 200 top fossil fuel companies have a market value of $4 trillion and debt of $1.5 trillion; another $6 trillion USD could be allocated to developing fossil fuels along the next decade. If three quarters of all carbon is unburnable most of those assets would be left stranded, a risk not yet discounted in capital markets. A low carbon emissions scenario would require equity valuations of energy firms to be reduced by 40-60%. Widespread economic effects are to be expected if the carbon bubble bursts, as public and private pension plans hold 46.8% of all oil and natural gas company shares. The required accelerated transition to a low-carbon economy requires thus to keep finance in check with the needs of climate stabilization.


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The decisions to be taken at the Paris COP are charged with consequences to the future of human society. The framework of the negotiations is however to be lagging further and further behind actual needs. The dimensions and obstacles posed by economic and financial forces driving emissions require not only a fast upgrading of market-based policy instruments, but also a widespread discussion about how changes leading to deeper technical and economic re-structuring can can be brought about.

References

Ackerman, F. And L. Stanton (2010), The Social Cost of Carbon, Economics for Equity and the Environment Network.

Baer, P., G. Fieldman, T. Athanasiou, and S. Kharta (2008), “Greenhouse Development Rights: towards an equitable freamework for global climate policy,” in Cambridge Review of International Affairs, 21(4), 649-666). For an update version, go here: http://www.ecoequity.org/wp-content/uploads/2014/11/National-fair-shares.pdf .

Friedlingstein, P. et al., (2014) Persistent growth f CO2 emissions and implications for reaching climate targets, in Nature GeoScience, Review Article, 21 September 2014, DOI:10.1038/NGEO2248.

Hansen, J. et al. (2008), “Dangerous human-made interference with climate: a GISS modelE study,” in Atmospheric and Chemistry and Physics no. 7, pp. 2287–2312.

Hansen, J., Kharecha, P., Sato, M., Masson-Delmotte, V., Ackerman, F., Beerling, D. J., … Zachos, J. C. (2013). Assessing “dangerous climate change”: required reduction of carbon emissions to protect young people, future generations and nature. PloS One, 8(12), e81648. doi:10.1371/journal.pone.0081648

IEA (2013), Redrawing the climate-energy map. World Energy Outlook Special Report, International Energy Agency, Paris.

IPCC (2014), Climate Change 2014: Synthesis Report, R.K. Pachauri and L.A. Meyer (eds.), Geneva, Switzerland.

Lenton, T., et al. (2008), “Tipping Elements in the Earth’s Climate System”, Proceedings of the National Academy of Sciences of the United States, Vol. 105, No. 6, Washington, DC, pp. 1786-1793.

Meyer, A. (2000), Contraction and convergence: the global solution to climate change, Green Books for the Schumacher Society, Totnes, Devon, UK.

Raupach, M.R. et al., (2014), “Sharing a quota on cumulative carbon emissions,” in Nature Climate Change, 21 September, DOI:10.1038/NCLIMATE2384.

Rockström W. S., et al. (2009). Planetary Boundaries: Exploring the Safe Operating Space for Humanity. Ecology and Society, 14(2), 32.

World Bank (2014), Carbon Pricing State & Trends, The World Bank Group, Washington.


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IUCN Commission on Environmental,


(CEESP)





Forthcoming Events

Held once every four years, the IUCN World Conservation Congress brings together several thousand leaders and decision-makers from government, civil society, indigenous peoples, business, and academia, with the goal of conserving the environment and harnessing the solutions nature offers to global challenges.

The Congress aims to improve how we manage our natural environment for human, social and economic development, but this cannot be achieved by conservationists alone. The IUCN Congress is the place to put aside differences and work together to create good environmental governance, engaging all parts of society to share both the responsibilities and the benefits of conservation.

The Congress is the place where IUCN’s more than 1,300 Member organisations exercise their rights, influence the global conservation agenda and guide IUCN’s work plan for the four years to follow.

The next Congress will take place 1-10 September in the Hawaii Convention Center, in the Hawaiian capital, Honolulu. It is being hosted by the State of Hawaii with the support of the Department of State of the USA.

Visit the Congress Portal

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The Wageningen University and the School of Oriental and African Studies (SOAS), University of London are calling for abstracts and presentations to the upcoming Conference Political Ecologies of Conflict, Capitalism and Contestation (PE-3C), organized by the to be held in Wageningen 7-9 July 2016.

We invite TEMTI members to submit an abstract and attend! More information about the Conference at this link and at https://pe3c.wordpress.com/.

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Economic Perspectives on Global Sustainability IssuesTEMTI’s working papers series is designed to provide reliable information and rigorous analysis on the human dimensions of environmental change. Its main objective is to open a much-needed space for reflection and understanding of the complex forces that are driving social inequality and environmental degradation worldwide.

Contributions to the series will come from research carried out by TEMTI’s network of experts. Economic Perspectives on Global Sustainability aims to strengthen communication and collaboration between the different communities of the International Union for the Conservation of Nature, as well as within its worldwide

https://pe3c.wordpress.com/

http://brambuscher.com/2015/10/06/second-cfp-political-ecologies-of-conflict-capitalism-and-contestation-conference-july-2016/

http://www.iucnworldconservationcongress.org/



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