Technology Policy in the Context of Ozone Layer Protection and Climate Change Mitigation

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1 Technology Policy in the Context of Ozone Layer Protection and Climate Change Mitigation BMZ-BMUB Event: 20 Years of Germany s Bilateral Engagement in the Multilateral Process of the Montreal Protocol Eschborn 28 September 2015 Dr. Jochen Harnisch Environment & Climate Policy Unit KfW Development Bank Bank aus Verantwortung

2 Green Finance by KfW Group: 36 bln. USD in 2014 Instruments: Grants Concessional and Commercial Loans Equity Mezzanine Finance KfW Group with its domestic and international mandate is owned by the German government

3 KfW Group: Worldwide presence 80 representative offices Mexico-City Guatemala-City San Salvador Tegucigalpa Managua Bogotá Quito New York Dakar Bonn Cologne Moscow London Berlin Brussels Kiev Frankfurt Belgrad Mazar-e-Sharif Sarajevo Priština Tiflis Ulan Bator Istanbul Tashkent Podgorica Baku Bishkek Beijing Tirana Ankara Dushanbe Skopje Jerewan Rabat Tunis Al-Bireh Damascus Kabul Amman Islamabad Kathmandu New Delhi Cairo Abu Dhabi Dhaka Vientiane Mumbai Rangoon Bamako Niamey Sanaa Bangkok Hanoi Ouagadougou Phnom Phen Accra Addis Abeba Cotonou Juba Jaunde Kampala Singapore Kigali Kinshasa Nairobi Bujumbura Daressalam Jakarta Manila Lima La Paz Brasilia São Paulo Windhoek Lusaka Pretoria Lilongwe Maputo Johannesburg 3

4 ODS/HFC: Situation Around the Year 2000 Differentiated and stepwise transition plan for ozone depleting substances under the Montreal Protocol Kyoto Protocol under implementation: HFCs part of a basket of greenhouse gases Search for economically efficient integrated solutions including energy efficiency Chemical industry main positions in policy process: safety and energy efficiency Wealth of pioneering and historical technology options avoiding fluorinated refrigerants and blowing agents Largely unexplored potential for leakage rate reductions beyond technical sound and economic good practice 4

5 Integrated F-Gas Policies: Exploratory Emission Abatement Cost Curve for 2010 Main results: - Rapid expected growth of HFC emissions as part of ODS replacement - Significant low-cost potential - Significant mid-cost potential - Significant share of currently hardly abatable emissions Source: Harnisch & Hendricks, 2000 for EU 5

6 Mobile Air Conditioning (MAC): Moving from Average Refrigerant Loss Rates to Distributions Main results: - Broad and skewed distribution of leakage rates - No clear relation to manufacturers - Weak relation to age of systems - Strong impact of high emitters Source: Schwarz & Harnisch, 2003 for EU 6

7 Supermarket Energy Efficiency: from Average to Distributions Main results: - Broad & skewed distribution of energy efficiency results - Unclear impact of design, use and maintenance - Difficult to select accurate reference value for technology assessment studies Source: Harnisch et al., 2005 (IPCC, SROC Chapter 3) 7

8 Exploring the Robustness of Technology Benefits Using Monte Carlo Simulations (ARBITRARY EXAMPLE) Main results: - Broad and overlapping distributions of TEWI - Superior mid-range TEWI for selected technologies Source: Rhiemeyer et al., 2009 for UBA 8

9 A Personal Outlook Part I Markets respond: not always in the way policy makers want Uncertainties are annoying but should not be ignored in policy process Search for economically efficient solutions has proven as a vital guidance The open question - who is the better driver of innovation: - Phase-outs schedules or - Technology-neutral performance targets? Overregulated markets with erratic policies will kill innovation and investment 9

10 A Personal Outlook Part II Substitution of ODS and Fluorinated Gases is an overall success story Overall a well a reasonably designed and implemented transition process However, international and domestic competiveness were minor issues Step-wise substitution and international technology transfer is half-finished Other critical success factors: - enforcement of policies - technical capabilities of equipment planners - compentence of maintenance companies 10

11 A Personal Outlook Part III The phase out of fossil fuels not quite the same story Transition challenge and complexity is orders of magnitude larger Competiveness issues and economic efficiency much more serious Rising international CO 2 -price will support economically efficient implementation Appropriate response time and credibility of policy framework are critical 11

12 Contact Details Dr. Jochen Harnisch Head of Division, Sector Policy Unit Environment & Climate KfW Group Palmengartenstrasse Frankfurt am Main Germany Phone Fax Jochen.Harnisch@kfw.de