Jorge Luis Filio Flores*
Governments’ efforts to curtain carbon emissions so far have not been enough to address the colossal challenge that climate change represents. According to the Financing Climate Futures Report (a joint effort between the OECD, the United Nations Environment Programme and the World Bank Group),governments must plan for long-term climate objectives and thus, it sets several policy recommendations for governments to act, recommendations that I mean to explore and expand in this article. My rhetoric is based on the belief that the best way to stay below 2°C rise in temperature is to delay most emissions reductions for decades to come while keeping in mind two things: 1) the most consequential climate decisions will happen in developing nations; and 2) that emissions must decouple from economic growth everywhere across different sectors.
ENERGY. An explanation of the rise of greenhouse gases (GHG) concentration in the last decades relies in the fact that the global energy matrix has counteracted the rise in renewables. There has been a stalemate from 2000 to 2018 in which the portion of global renewable electricity generation grew by 7%, but emissions-free nuclear declined by the same percentage. Meanwhile, coal only declined by 1% and was replaced by natural gas (which still has a high global warming potential). An increase in operational flexibility and a diversified energy matrix is needed, taking into consideration generation costs for developing countries. In this regard, hydropower in Latin America (LATAM) for example, is the biggest source in the regional energy matrix and will remain so. The IEA estimates that this energy source will be an essential part of the global energy dispatch for the future as it is considered the cheapest way of producing electricity according to the IRENA, which is pertinent in the context of developing countries where there exists a huge potential for hydro. Another solution is to adopt the Chinese State Grid model of energy transmission: building colossal cable lines that deliver clean energy generated far away from urban centers. Either of these solutions will work as this sector leads the way worldwide for decarbonization.
TRANSPORT. The hardest sector to electrify is transport as air and sea-travel are heavily dependent on fossil fuels and electric vehicles have not a significant presence in developing nations yet due to their acquisition costs. Scientific development in storage technologies remains a key area, but policies should address immediate solutions, even more when forecasts scenarios by British Petroleum shows that even with a ban in internal combustion engines, emissions from this sector will still increase in the decades to come. To phase out subsidies for fossil fuels has been the best recommendation, but many South nations cannot open the sector to the market yet. To disentangle their fiscal reliance on fossil fuels with each yearly budget is the perfect start.
INDUSTRY. Cement, steel and chemicals are key to manufacturing and to many other industries, but their production is one of the most pollutant as it is highly energy-intensive. When you discuss policies to decarbonize an activity that has produced the world’s most used human-made material (cement) it is sound to think that there is a generalized reluctance from the private sector to embrace change. Approximately 8 percent of the world’s CO2 emissions come from this activity only; in other words, if it were a country, the cement industry would be the third-largest emitter in the world. A difficult task for national governments is to set policies for cement companies to cut emissions in order to adhere to the Paris Agreements. To encourage and even to give fiscal compensation for implementing Carbon Capture and Storage (CCS) technologies shows to be the right path to move on the private sector.
LAND USE. The Financing Climate Futures Report mentions that countries must strike a balance between food production and biodiversity conservation while managing the sector’s emissions, which again can be handled partially with CCS technologies. The best policy recommendation is to stop deforestation, which is indiscriminately practiced in Southeast Asia and South America. Another big focus for land use policies is on cities. To make connected and compact cities is a task that goes hand in hand with urban development by eliminating incentives for urban sprawl; a premise that will have to be kept by local governments, especially in Africa, as these will face expanding cities caused by the biggest population increase yet seen in recent history.
Trade policies are strong driving forces to prevent or encourage emissions. A clear example is the recent European Union-Mercosur trade agreement in which tariffs in LATAM’s agricultural products will decrease in the European market, while the EU will sell cars to South American nations with less restrictions. The automotive industry is betting in developing nations to replace the EU as its main market, in which combustion engines will be banned little by little in the years to come, while an increase in agricultural production caused by the agreement in countries like Brazil, will led to an increase in GHG emissions. Also, trade pressure on any of these sectors proves to be discouraging to achieve the aforementioned recommendations. For example, the imposed tariffs in steel and aluminum set by the US to several nations earlier this year, jeopardize the sector’s capabilities to decarbonize. Finally, the report concludes that countries at all levels of income now can build lasting economic growth at the same time as they reduce the risks of climate change by accelerating low-carbon transformation. This will be achieved by integrating climate into core economic decision-making processes. With the recent pernicious effects caused by climate change everywhere, alternatives and recommendations such as these must not be overlooked by anyone that has a say in public policies, especially those in the developing world.