Delinking, recession and recovery in the transition to the low carbon economy

Transcription

1 ESPON Workshop 2014 Opportunities and threats for territorial cohesion: Blue Growth and Urban Poverty Delinking, recession and recovery in the transition to the low carbon economy Anders Chr. Hansen ENSPAC at Roskilde University

2 Carbon linked to economic growth in industrial age app CO2-emissions and GDP growth in Europa But in recent decades CO2-emissions are increasingly delinked from GDP growth

3 A revolution in energy systems : Declining emission budget Delinking (decoupling) = keeping the emission budget while increasing employment etc. Allocated to ETS sector and non-ets sector by member state Regional emission budgets?

4 Non-ETS emissionbudget reduction rates Effort sharing catch-up principle applied on regions: Low per capita GDP => catch up => emission growth NMS target higher 2020 emissions Effort sharing principle of common, but differentiated responsibility: Low income MS allowed even growing emission budgets Targets set according to economic limitations At best relative delinking, not absolute

5 Local government in NMS: absolute delinking budgets Local governments planning reduction ->2020 Bulgaria BG 14 Croatia HR 46 Czeck Rep. CZ 5 Estonia EE 2 Hungary HU 19 Latvia LV 19 Lithuania LT 13 Poland PL 30 Romania RO 42 Slovakia SK 4 Slovenia SI 13 Local governments who assess their potentials, plan for emission reduction not growth - to 2020 economic growth That is, absolute delinking Regional emission budgets according to potentials: Resource efficiency catch-up potentials energy efficiency of buildings energy efficient power and heat-systems (NB: Not same energy intensity!) Ecosystem limits: Sink capacity of regional air Ecosystem potentials: Wind, PV etc.

6 Overconsumption of air as a sink for PM10-emissions Share of population exposed to PM10-pollution exceeding health limits 2005 high capacity use 2009 the great recession 2010 back in business Overall progress in delinking of PM10, but still serious regional challenges Pulsating overconsumption but still excess exposure even in the deepest recession

7 Overconsumption of air as a sink for ozone forming emissions Share of population exposed to ozone pollution exceeding limits 2005 high capacity use 2009 the great recession 2010 back in business Links between economic activity and overconsumption are regional Overconsumption varies with natural conditions such as sun and wind

8 Basing overall target on sub-targets? POP Employment rate *JOB /POP *GDP /JOB Final energ y intensity *FEC /GDP Gross/f inal energy use ratio *GIC /FEC Invest in delinking *CO2 /GIC Carbon intensity Productivity Population CO2- emissions = CO2 FEC = final energy consumption GIC = Gross inland energy consumption CO2 = CO2-emissions POP = Population JOB = employment GDP = Gross domestic product

9 Regional targets for final energy use? Same final energy intensity in all regions is not feasible Regions specialised in pulp and paper not same energy intensity as regions specialised in financial sector etc. Alternatives: Similar regions to catch-up with Rates of progress in energy intensity

10 Local income from generating onshore wind energy Regional potentials for economic growth by substituting fossil by wind energy differ widely The North European wind belt has very good opportunities Offshore wind even more European transmission grid investments required for taking advantage of the northern wind resources in larger parts of Europe

11 Local income from generating PV electricity Regional potentials for economic growth by substituting fossil by PV energy differ widely The South European solar irradiation offers very good opportunities European transmission grid investments required for taking advantage of the solar electricity resources in larger parts of Europe

12 Drawing up regional emission budgets: Income based emission budgets like effort sharing not reflecting potentials Budgets based on realistic assessments of potentials: Resource efficiency Renewable energy Progress towards a low carbon economy: Keeping the emission budget main priority Whether through resource efficiency or renewable energy less important How do we measure progress towards a low carbon economy? Delinking, decoupling

13 Delinking GHG emissions how are we doing? GDP and greenhouse gas emissions per capita, EU EU27, EU15 and selected EU15 countries Delinking trend: Increasing GDP trend, declining emission trend But short term covariation, indicating some link

14 Is delinking also progressing in the new member states? Apparently similar delinking although at a lower level of GDP Short term co-variation of GDP and GHG emissions Higher GDP also means higher energy consumption => catchup with GDP ->

15 Temporary, apparent and insufficient progress Recessive emission reduction = Emission reduction due to Recession Deindustrialisation Relative delinking The right direction, but insufficient as to budgets A method for capturing temporary, apparent and insufficient progress in delinking

16 Are we delinking enough? Much higher pace required for than achieved Conflicting Europe 2020 targets: Employment rate 75% Final energy use -20% Red: Actual achievements Green: Achievements required for reaching targets Much more investment in delinking needed in than took place in Commission: Unlikely to reach target nonbinding!

17 Transformation to a green economy is a learning process and learning requires data Primary data on energy consumption are only collected and processed at the regional level in some countries They are not standardised and of varying quality Emission data for point source emission available in an improving quality Systematic collection of primary data by region and standardised processing of them A task for ESPON in joint venture with EUROSTAT and NSIs?

18 Delinking FEC and GDP Warning: 2009 the year of the great recession Data gaps even in shown regional data General eastwest and north south patterns

19 Historically high rate of unemployment due to historically low rate of investment to GDP Green finance, regulation, information, innovation EU15: Growth and unemployment Investment Green energy econosphere Demand Capital stock Green GDP growth Employment Green jobs Investment works on unemployment unless the economy runs at full employment

20 Wind turbine industry in % of private sector employment, 2010 Wind turbine industry important sector in the Danish economy Investment in wind turbines in Denmark and elsewhere reduce emissions and create jobs Even in remote areas (south Denmark) Source: Danish Wind Industry Association

21 Additional jobs due to green energy investments App. 30,000 additional jobs by investing in renewable rather than fossil energy 9 times as many jobs by investing in energy efficiency Additional jobs: Annual average 40/EE/30 / reference scenario (Climate package 2030, Commission Impact Assessment). Only investment-induced employment excl. operational & fuel employment

22 Anatomy of renewable energy employment in Germany 2013 The anatomy of renewable energy employment: Non-combustibles (or nonfuel sources) dominate the employment effect Even in biomass, the capital related (investment + O&M) exceeds the fuel related employment Indirect employment as important as indirect employment Indirect employment in other countries not included O Sullivan, M. et al Bruttobeschäftigung Durch Erneuerbare Energien in Deutschland Im Jahr Eine Erste Abschätzung., Dritter Bericht Zur Bruttobeschäftigung. Bundesministeriums für Wirtschaft und Energie.

23 Energy expenditures share in household budgets by quintile Same pattern in all MS: Energy expenditures larger share in small budgets Water and waste water as well Higher energy and water prices affect disproportion ally the small budgets Return revenue to low income households

24 Low carbon economy: Additional investments & fuel savings EU additional investments independent of whether the rest of the world joins or not Fuel savings depend on global deal vs. fragmented transformation No global action => less fuel svings Source: Impact assessment of A Roadmap for moving to a competitive low carbon economy in 2050.

25 Climate package 2030 Additional investment due to 2030 package: % of GDP % in EU % in NMS10 Unemployment rate now and additions to investment rate in the 20s Advancing investments? Investment rate change: Annual average 45/EE/35 relative to reference scenario (Climate package 2030, Commission Impact Assessment). Unemployment rate: 2013 (AMECO).

26 EU27 share of GDP spent on fossil fuel imports A still larger share of GDP is sliced out to pay for imported fossil fuels

27 Share of GDP spent on fossil fuel imports by MS, 2012 The import of fossil fuel slices out a larger share of GDP in countries that already have low GDP It reduces the domestic spending correspondingly (unless it conditions exports) Recent events have accentuated the geopolitical imbalance associated to fossil fuel dependency of European economies without own fossil fuel resources

28 Regional renewable energy employment in Germany, Renewable energy jobs per 1000 jobs Germany: 9.2 Large regional differences: Berlin and Hamburg not specialized in physical commodity production in general Still, Hamburg is a growth pole for renewable energy research, development and innovation Agentur für erneubaren Energien,

29 Underinvestment in productive capacity if investments with environmental rather than economic returns? Adjusted net savings rate is the share of GNI that adds to future productive capacity when consumption of natural as well as man-made capital has been taken into account Overconsumption = negative savings rate All EU countries have net savings rates 5-20% Comfortable margin for investments with environmental rather than financial returns

30 A green economy enables society to prosper, including all in the prosperity without over-consuming ecosystem services Dimension Ends Means Not: Ecological Ecological budget compliance Investment in using and producing green technology Over-consumption of ecosystem services Economic Steady employment & innovation Stabilising and long-term investments Bubble growth, debt trap Social Inclusion in formal economy: labour market and social system Investment in human resources: Education, health, security Social exclusion, poverty

31 Which factors caused CO2-delinking ? EU15: CO2 (except AT, LU): Population & productivity energy & carbon intensity NMS: zero growth, negative in HU, SK, CZ, RO. Negative population growth, but positive employment growth. Less progress in carbon intensity. EU28: Energy > carbon intensity

32 What is a green economy? Political vision of the 21 st century economy, not primarily a scientific concept UN consensus at Rio+20: The future we want : A green economy within the context of sustainable development EU Roadmap to a Resource Efficient Europe: The Vision: By 2050 the EU's economy has grown in a way that respects resource constraints and planetary boundaries, thus contributing to global economic transformation. Our economy is competitive, inclusive and provides a high standard of living with much lower environmental impacts. All resources are sustainably managed, from raw materials to energy, water, air, land and soil. Climate change milestones have been reached, while biodiversity and the ecosystem services it underpins have been protected, valued and substantially restored Isn t that just sustainable development? Green economy agenda is not different from sustainable development, but the operationalization of the principles of sustainable development: Progress in economic, social and ecological dimensions simultaneously A green economy enables society to prosper and to include all segments of society in the prosperity without over-consuming ecosystem services