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Climate Change as Human Development Challenge

Climate Change as Human Development Challenge. Presented by Marina Olshanskaya Tuesday, 16 December RBEC DRR Meeting December 2008, Istanbul. Agenda. Climate Change as a Global Challenge International Climate Change Negotiations RBEC Context Climate Change in UNDAF

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Climate Change as Human Development Challenge

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  1. Climate Change as Human Development Challenge Presented by Marina OlshanskayaTuesday, 16 December RBEC DRR Meeting December 2008, Istanbul

  2. Agenda Climate Change as a Global Challenge International Climate Change Negotiations RBEC Context Climate Change in UNDAF Emerging Trends in Climate Change Financing

  3. The 21st Century Climate Challenge • Climate Change has three distinctive characteristics – it is cumulative, the effects are irreversible and it is global • Need for urgent collective response to avoid dangerous climate change

  4. Avoiding Dangerous Climate Change • Temperatures increase as CO2 emissions and concentrations rise • Defining dangerous – keeping below a 2 degreeC increase in temperature • To keep within 2C threshold CO2e concentration should stabilize at 450 ppm • The UNDP 2007/2008 HDR estimated that the 21st Century carbon budget is set at 1,456 Gt CO2

  5. 2°C t rise -internationally dangerous threshold • Increased exposure to coastal flooding: • Accelerated melting of Greenland and Antarctic ice sheets will lead to sea levels rising by several metres and forced human resettlement on a vast scale – 180-230 mln people are predicted to be affected • Heightened water-energy insecurity: • Accelerated glacial melt will compound already severe ecological problems across northern China, India and Central Asia initially increasing floods before reducing the flow of water to major river systems vital for irrigation and hydropower • Reduced agricultural productivity: • Due to intensified droughts and changes in rainfall patterns an additional 600 million people will face acute malnutrition by 2080s over and above the level in a no-climate change scenario

  6. To keep within 2C threshold CO2e concentration should stabilize at least at450 ppm • 450 ppm – 50% likeliihood to stay within 2°C • 550 ppm - 80 % probability to exceed the 2°C threshold • 650 ppm - 60 - 95 % of exceeding 3°C • 883 ppm - 50 % chance of exceeding 5°C T increase • Concentrations of CO2 are increasing at 2 ppm each year. At this growth rate, we will reach 450 ppm in 2035 • Continued growth of CO2 emissions for another 10 years will make it impossible to avert exceeding this threshold

  7. The 21st Century carbon budget is set at 1,456 Gt CO2 … and is set for early expiry

  8. World Energy Outlook 2008 (IEA) • Global GHG emissions, if left unabated, will rise 35% by 2030 compared with 2005 levels • Around 97% of the growth in emissions will happen in developing and transition countries (China, India, Russia, Brazil, Mexico, South Africa) • A 450 ppm trajectory could not be achieved without commitments from developing countries, even if OECD countries reduce their emissions to zero

  9. 2020 Charting a course away dangerous climate change: A window of opportunity of 100 months • A sustainable emissions pathway with respect to 1990 level is as follows • The world – cuts of 50 percent by 2050 with a peak by 2020 • Developed countries – cuts of 80 percent by 2050 • Developing countries – cuts of 20 percent by 2050 Today

  10. The problem of inertia - the case forAdaptation • Changes in key climatic parameters are already evident, including in RBEC • Europe has warmed more than global average, with a 0.950C increase in last 100 years • Drought in Central Asia • Most of affected area semi-arid steppe with winter & early spring precipitation • Precipitation between 1998-2001 less than 55% of long-term regional average • Drought exacerbated by early snow-melt and higher temperatures • Drying trends in South & South-East Europe • Southern & South-eastern Europe have become drier by up to 20% (past century) • Frequency of “very wet” days has decreased in Southern Europe (past century) • Consistent with projections of increased rainfall variability & intensity, more frequent drought, decline in snow and ice cover

  11. DRIER Sea-level rise hazards Fires Flood risk Water shortage Climate change impacts are evident and anticipated to intensify across the region • IPPC TAR4 indicates increase of 0.410C/per decade • In Central Asia, 1 to 2°C rise in temperature per century Source: Based on IPCC AR4 (projections for 2080-2099), NCs and other sources

  12. Inverse relationship between climate change vulnerability and responsibility • - Some people walk more lightly than others • - Disaster risks is skewed towards developing countries: • 1 in 19 people are affected in developing countries • The corresponding number is 1 in 1,500 in OECD countries

  13. Agenda Climate Change as a Global Challenge International Climate Change Negotiations RBEC Context Climate Change in UNDAF Emerging Trends in Climate Change Financing

  14. Climate change entered the policy radar in 1979

  15. The Convention clearly links climate change to development • Convention objective • allow ecosystems to • adapt naturally to • to climate change; • ensure food production • is not threatened; and • enable economic development to • proceed sustainably achieve stabilization of greenhouse gas concentrations in the atmosphere at a low enough level to prevent “dangerous anthropogenic Interference” with the climate system within timeframe sufficient to UNFCCC signed by 191 Parties – near universal membership

  16. Annex II Non-Annex I • Industrialised countries • Provide financial • resources to enable • developing countries to: • mitigate • adapt • Promote and facilitate • technology transfer to • EITs and non-Annex I • Parties • Developing countries • COP identifies • activities to address • non-Annex I needs • and concerns • no quantitative obligations • Least Developed Countries given special consideration The Convention clusters countries in three groups • “Common, but differentiated responsibilities” Annex I • Industrialised countries & Economies in Transition (EITs) • Adopt policies • and measures with • aim of reducing GHG • emissions to 1990 • levels • EITs have “flexibility” • in implementing • commitments

  17. RBEC has mix of Annex I and NAI countries Annex I Belarus Bulgaria Croatia Czech Rep. Hungary Latvia Lithuania Poland Romania Russian Fed. Slovakia Turkey* Ukraine Non-Annex I (NAI): Albania, Armenia, Azerbaijan, Bosnia and Herzegovina, Cyprus, Georgia, Kazakhstan*,Kyrgyzstan, Macedonia, Malta, Moldova, Montenegro, Serbia, Tajikistan, Turkmenistan, Uzbekistan

  18. UNFCCC negotiations are dominated by a few key positions • European Union • climate change is urgent issue • chance to avoid dangerous interference could be lost in next 10 to 20 years • need binding targets & timetables • United States • climate change is long-term problem • premature to think about post-2012 framework • focus on technologies that provide reductions in 20-30 years, not binding targets and timetables • Developing countries (G77) • climate change urgent issue • developed countries are responsible and must act first • priority is development, poverty reduction • need climate-friendly technologies Economies in Transition are fragmented and voiceless

  19. Key issues at centre of climate negotiations • Establishing new emission reduction targets (post-2012) and designing new “Kyoto Protocol” • Engaging US (20% of global emissions) and non-Annex I countries in GHG reduction efforts (particularly China and India) • Financing for climate change mitigation and adaptation in developing countries: • Modalities and funding for technology transfer • New Climate Change Funds (e.g Adaptation Fund) • Role of GEF and GEF Agencies (UNDP)

  20. Agenda Climate Change as a Global Challenge International Climate Change Negotiations RBEC Context Climate Change in UNDAF Emerging Trends in Climate Change Financing

  21. Mitigation: reduce emissions, reducing magnitude of CC Adaptation: reduce vulnerability to CC impacts, reducing losses Basics of Climate Change Management: Mitigation vs adaptation Global climate change: change in mean global temperature, changes in regional temperature, rainfall, pressure, circulation etc Greenhouse gas emissions Climate change impacts • Adaptation and mitigation are complementary strategies

  22. All sectors and regions have the potential to reduce GHG emissions Note: estimates do not include non-technical options such as lifestyle changes

  23. Carbon intensity: RBEC & other regions (2004) World average

  24. Costs and potential for GHG emission reduction in EITs

  25. How do you think about work the heating supply system in your apartment? Don’t work at all No answer 20,5% 1,8% Good 47, 7% Bad 30, 1% RBEC’s key CC mitigation priority: buildings • Residential & commercial buildings • energy efficient appliances; efficient lighting, thermal insulation, new building design, solar water heaters Turkmenistan: 50% of customers are not satisfied with heat systems Actual performance: over-heated in summer and under-heated in winter Source: UNDP/GEF Project Report TUK/01/G35

  26. Kyrgyzstan: 49% of final energy use in buildings • 30% reduction in energy consumption (from 135 to 95 kWh/м2) in residential buildingswill result in saving of 2,500 GWh/yror 76 mln$/yr Source: UNDP/GEF EE Building Project in Kyrgyzstan

  27. RBEC’s other CC mitigation priorities: transport • Transport • more efficient cars and trucks, switching fuel to compressed natural gas, switching from cars to public transport, multi-occupancy lanes, etc. Use of public transport in Romania 1990-2000 (million passenger-km) Number of passengers cars in Romania 1990-1998 (thousand cars) Source: UNDP/GEF PDF B concept

  28. Small hydro power: Caucasus and Central Asia Wind power: KAZ, Black and Caspian coats Biomass: Central and Eastern Europe Biogas: Ukraine, South-Eastern Europe Landfill Gas: Large Urban Centers Solar Heating: Central Asia, Turkey RBEC’s CC Mitigation priorities: renewable energy

  29. Why renewables are important for UNDP • Energy access 0.5 – 1 mln Tajiks rely on wood fuel for their heating and cooking needs in winter • Energy security • 50% of Georgia’s power comes from imported oil and gas • Economic competitiveness • 20% of power produced in Kazakhstan is lost during transmission from North to South in highly centralized national grid • Effective use of resources • At least 15% of the Northwest Russia energy consumption could be covered by domestic wood waste if the annual cut is harvested for 100% and not for 40% as today

  30. RBEC GEF-funded CC Mitigation Portfolio 1998-2008 • Completed: 26.7 mln US$ • Under implementation: 32.9 mln US$ • Under development in GEF-4 (until 2010): • Hard pipe-line (approved concepts): 26.4 mln US$ • Soft pipe-line: 24.4 mln US$

  31. Where we work (completed + under implementation): • EU Members States: Slovakia, Czech Republic, Hungary, Poland, Slovenia, Bulgaria and Romania • Western CIS: Armenia, Belarus, Georgia, Russia, Ukraine • Central Asia: Kazakhstan, Kyrgyzstan, and Turkmenistan • Western Balkans: Croatia, BiH and Albania

  32. CC Mitigation Pipe-line for GEF-4: 50.8 mln US$ • Hard pipeline (PIF approved): • Soft pipeline (GEF approval is pending):

  33. Update on RAF: Individual allocations

  34. Update on RAF: Group allocations

  35. A typical UNDP/GEF CC Mitigation project • Objectives are environmental: GHG reduction • …but day-to-day activities are in the policy/business world: • - find a “client”: energy consumers (residents), suppliers (DH companies, IPPs), bill payers (municipalities) • - prepare 'bankable‘ (cost-effective) energy efficiency/renewable energy projects and take them to potential financiers • - work with relevant authorities to address policy/regulatory barriers: Heat/RE Laws, smart tariffs, norms & standards • - capacity building for all partners involved • - demonstration (co-financed): biomass, co-generation, decentralized heating systems, low-costs EE measures (insulation) • Implementing partners: NEVER/RARE Ministries of Environment, but Energy, Economy, Municipalities, Education, Construction, NGOs

  36. Summary • Climate Change is a global challenge which requires urgent and collective actions to stay within dangerous 2C threshold • World is divided: responsibility vs vulnerability • RBEC is the most carbon intensive region globally: strong linkages between GHG emission reduction and human development • CC impacts are already being felt, particularly in Central Asia • Very low national capacities to deal with climate change issues at national and global level

  37. Summary - UNDP • 10-years experience with GEF projects on energy efficiency and renewable energy; ambitious pipe-line with main focus on building sector; • Few GEF-funded projects on adaptation (Hungary, Armenia, Albania, Tajikistan), piloting territorial approach (Albania), climate proofing (Armenia) and economic assessment of climate risks (Croatia HDR) • Climate change is seen as “environmental issue”; linkages with UNDP’s core areas are not realized/built upon • - Human capacities at COs and BRC are insufficient to remain competitive in the field

  38. Agenda Climate Change as a Global Challenge International Climate Change Negotiations RBEC Context Climate Change in UNDAF Emerging Trends in Climate Change Financing

  39. Agenda Climate Change as a Global Challenge International Climate Change Negotiations Update on RBEC Climate Change in UNDP/UN Emerging Trends in Climate Change Financing

  40. Content • Climate change financing needs and challenges • Overview of carbon market • Financing for CC mitigation: how to make climate change mitigation cost-effective • Meeting financing gaps for CC adaptation Source: UNFCCC, 2008

  41. Basic Economics of Climate Change • Costs of climate change = • costs of mitigation ($/tCO2) + costs of adaptation • (the less is spent of mitigation, the more will be spent on adaptation) • Key tasks: • Identify and finance most cost-effective measures for GHG emission reductions globally • Provide funding for adaptation, particularly for the most vulnerable regions, sectors and groups of people

  42. Financing Requirements for Climate Change Mitigation • Investment required in energy supply infrastructure worldwide to meet growing energy needs to 2030 ≈$20 trillion. 50% in developing countries (IEA 2007) • Additional investment (USD 200 billion) will be needed by 2030 to mitigate climate change (UNFCCC 2008) • Estimated additional needs to address climate change is large comparing to what is currently available under Kyoto and UNFCCC, but small in relation to global GDP (0.3-0.5%) and global investment • ODA and IFIs financing for energy average US$6-7 bn/year ( ≈ 2% of required); > 95% of financing needed from private sector or governments • The double challenge: • find ways to attract enough investment to meet growing needs • avoid carbon intensive path and steer investment toward low emission technologies (‘leapfrog’)

  43. Carbon market already plays important role in shifting investment flows • Valued at US$64 billion in 2007, 100% increase to 2006; • In 2007 CDM/JI market value was at US$8.2 billion, up 34% from 2006 • Voluntary market is much smaller, but growing v. fast Source: World Bank 2008

  44. Type of transactions on carbon market • Allowance-based Transactions Buyer purchases emissions allowances created and allocated by regulators under cap-and-trade regimes [Assigned Amount Units (AAUs) under Kyoto Protocol or EU Allowances (EUAs) under EU Emission Trading Scheme] • Project-based Transactions • Buyer purchases emission credits from project that reduces GHG emissions. The most notable examples of project-based transactions are the Clean Development Mechanism (CDM) and Joint Implementation (JI) mechanisms of the Kyoto Protocol, generating Certified Emission Reductions (CERs) and Emission Reduction Units (ERUs) respectively. No difference in quality between emission allowances and project-based credits, once the latter are issued !

  45. How CDM works: Cost-Effective CC Mitigation and Human development • Quota EAUs CERs Every year in the North, a factory is given emission allowances to meet a particular quota. If it emits more than its quota, it must purchase missing allowances/ certificates In the South, a wind generator is built instead of a coal power plant. This avoids emissions: the project gets a corresponding amount of certificates (CERs) and can sell them

  46. CDM Market Growth, tCO2e Source: World Bank 2008

  47. Prices: Primary/Secondary CERs, EUA Source: World Bank 2007, PointCarbon 2008

  48. CDM delivers on clean energy financing (tCO2e) Jan. 2005 to Dec. 2005 Clean energy: 11% Jan. 2007 to Dec. 2007 Clean energy: 64% Source: World Bank 2008

  49. “Market is a marvel”: Carbon market finds the best investments

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