The Meaning of Green Growth: A View from Taiwan

1. The Meaning of Green Growth:A View from Taiwan R. Yang May 30, 2011

2. It’s Serious Nowin UK Chris Huhne, UK Energy Secretary upon announcing on May 17, 2011 … that UK will adopt legally binding targets to cut GHG emission by 50 % from 1990 levels in 2025 “It will establish our competitive advantage in the most rapidly growing sectors of the world economy,” “It will generate jobs and export opportunities in these sectors - maintain energy security and protect our economy from oil price volatility. It's a framework for growth, not just for action on climate but for growth and prosperity.” R Yang

3. Brave New Green Worldin Germany • Brave new post-Fukushima targets • Renewable energy: double renewables to 35 % of consumed electricity by 2020, 50 % in 2030, 65 % in 2040, 80 % in 2050 • CO2: 40 % cut from 1990 levels by 2020, 55 % by 2030, 80 % by 2050 • … and do all these without nuclear (?!) • Determination in the face of huge challenges • Huge shift in power: presently 50 % from coal, 23 from nuclear, 10 from natural gas (and they are a lot cheaper than renewables) • Huge new infrastructure needs: 4,000 kilometer of “eco-electricity highways” needed; huge storage needs yet without technology • Huge incentive policies: eg. spending 4 billion Euros annually just to incentivize citizens to upgrade energy efficiency of their homes and buildings • The strong to get stronger • Germany has already 16 % of world green energy market share • Over the past decade, green energy has already generated 300,000 new green collar jobs, according to Environmental Minister Norbert Ronttgen R Yang

4. An Update onKorean Green Business Development Actions • Aggressive GHG Reduction targets • GHG to peak before 2020(4 percent below 2005) • Aggressive green business strategies and actions • Commit 2 percent of GDP to GHG reduction (and green business development) every year. Accept 0.49 percent reduction on annual GDP • Announced $ 24 billion on Smart grid-based infrastructure project(90 percent from private sector) in 2009 • Announced $ 36 billion program on renewable energy($ 30 billion from private sector) in 2010 • Announced $ 9 billion Yellow Sea offshore wind project (largely from private sector) in 2010 • Quantitative targets, ahead of schedule • Targeting to become the world’s 7th largest green tech export economy with sales in renewable energy technologies of $ 36.2 billion in 2015 • Early win: KEPCO won $ 43 billion United Arab Emirates large nuclear station projects in January 2010 (original target for nuclear export: 2013) R Yang

5. Green Growth: the New Dynamics • Old dynamics: academic driven, internalizing the externalities • Pricing (taxes, fees, etc.): internalizing costs of GHG emissions • Cap and Trade: man-made market to internalize costs of GHG emissions • New dynamics: business opportunities driven… market and competition strategies • Huge demand: HSBC estimates green energy market to grow from $ 500 billion now to $ 2 trillion a year in 2020 • Green energy industries: countries without them can’t afford greenhouse gas reduction (GHGR) or green growth (GG); it’s expensive, and you would be shipping investments and jobs overseas • Global competition: countries to use tough GHGR targets to nurture their green industries for positioning in the future low carbon world. • Driving forces: tough GHGR targets, quantitative action plans, and aggressive incentives • At the heart of it all: low carbon business opportunities! R Yang

6. Encouraging Developmentsat the Global Action Front • Significant development: Copenhagen Accord • Developed and developing economies to share common but differentiated responsibilities, and both to be subjected to some form of MRV (measurement, reporting and verification). • 140 countries has now “associated” with the Accord, with 40 non-Annex I countries announcing voluntary targets. • At COP16, Japan flatly rejected extension of the Kyoto Protocol (Ambassador Yamada: “There is zero possibility.”). • Why it is so significant for GHGR & GG actions • Major developing economies are now on board. • Challenges as daunting as GHGR must be led by business, who possesses the bulk of mankind’s “execution” capacities • The Accord is voluntary. No country can reasonably expect its businesses to do much beyond their best interests would allow. • The two-headed beast (“GHG reduction targets” and “green business opportunities”) will drive future GHGR actions. • Is the glass now “half empty” or “half full”? R Yang

7. The Future of Green Growth There are maybe 40 to 50 countries capable of creating competitive green energy industries. These countries also emit more than 90 percent of the world’s GHG. They will do the bulk of the world’s GHG reduction work. Competition for the emerging global green technology market will be fierce, and fierce competition is needed to drive green technologies forward. Countries that are not yet capable of creating competitive green energy industries will do their best to fulfill their voluntary Copenhagen Accord commitments and concentrate on development so they may one day join the races for the world’s low carbon future. Significant future consultations and negotiations will happen more at G20, MEF, etc. The existing UN mechanism will become increasingly a forum that bridges the needs and concerns of the developed and developing economies, as well as the NGOs. Green Growth will have to happen alongside adaptation (the glass will probably always be half empty). R Yang

8. Technology:the Limiting Factor and the Opportunity • The green energy technologies of today are generally much too expensive and inadequate for our 450 ppm and 2○C aspirations. • Lack of good-enough technologies is perhaps the most “structural” reason why Copenhagen Accord commitments from nations don’t add up to what the world needs to achieve. • Substantial and even revolutionary technologies need to emerge. • Something to understand about green energy technologies • Technologies are not created equal. The speed of “high tech” development was largely the result of the application of quantum mechanics which doesn’t work for many of the large, complex-system oriented energy technologies. • The Silicon Valley model may not work here. What could be revolutionary in digital electronics may only be evolutionary in energy. • Government supported long-term research is very relevant. • Fierce competition is the prime mover. • Creating business opportunities through clever government incentive policies is crucial. R Yang

9. A Sample of Essential Green Energy Technologies • Much cheaper and safer energy storage technologies • Renewable energy will ultimately be limited by it. • Viable electric vehicles will live or die on it. • Much lighter wind turbines • The economics of mankind’s most important renewable energy – offshore wind will depend on it. • Much cheaper and more efficient photovoltaics • Needs to go down 5 to 10 times. • Much cheaper carbon capture technologies • Whether we can close the circle on “green” power generation depends on it. • More energy efficient HVAC technologies • Air conditioning about 40 percent of Summer peak load. • Nuclear fusion at reasonable costs (?!) • Mankind’s ultimate energy solution … now maybe as elusive as 50 years ago. R Yang

10. Thank You