Low Carbon Economy
There is no doubt in the issue that the climate is
changing. The magnitude or extent of climate change is projected by different
scientific models. The average of many models predict that at higher emission
scenario the temperature of the earth is going to raise by 4 degree Celsius
above pre-industrial level by 2100 AD which would have a threat to the
existence of humanity. Also at lower
emission scenario the temperature is projected to rise to about 2 degree
Celsius. The rise in temperature of the earth should be limited to 2 degree
Celsius. According to IPCC to achieve
this aim there should be cut in global emission by 50% by 2050 compared to
1990. For this the developed countries like US, European Union and also the emerging
economies like China, India, South Korea should come together towards a
comprehensive climate agreement. All the deals that have been done are not
strong and are mostly fragmented.
Low carbon economy basically means economy that is
based on minimal output of Greenhouse gases specially carbon dioxide. It would
address the challenges of diminishing fossil fuel reserves, climate change,
environmental management and finite natural resources serving an expanding
world population. The world has felt urgency for the low carbon economy but
they are afraid that with the adoption of it the overall Gross Domestic Product
(GDP) of the world would fall apart as it may invite a higher costs and slow
economic growth. However, research and studies have showed that taking steps
towards restraining climate change need not essentially lead to economic
declivity. Infact there are ways by which we can progress towards both the
goals of abating carbon reductions as well as increasing economy.
One of the many ways is increasing
carbon productivity. Carbon productivity is obtained by calculating amount of
carbon dioxide emitted per ton to its economic productivity. Eric
Beinhocker and Jeremy Oppenheim (McKinsey's Climate Change Special Initiative) stated
that “The world today produces around 740 US dollars of GDP for
every ton of emissions. If we are to cut emissions in half by 2050 versus 1990
levels as recommended by the IPCC, and keep the world economy growing at more
than 3 percent per year in real terms, then global “carbon productivity” must
increase by a factor of at least 10, that means from 740 US dollars in GDP per
ton today to 7,300 US dollars by 2050.”
European Union were successful in decoupling carbon dioxide emissions in their economic growth.
European Union were successful in decoupling carbon dioxide emissions in their economic growth.
They decreased their 2010 greenhouse gas emissions by
15.4% below 1990 levels. At the same time they had an increase in their GDP by
more than 40%. EU are on track towards 20% emission reduction by 2020 [5].
One of the major activity of
carbon emissions is the production of electricity. Many countries have failed
to control their emission in this aspect because of mainly three reasons. First
buyers prefer low price electricity and fossil fuel electricity is often the
lowest cost. Secondly, most countries allow free disposal of carbon dioxide into the atmosphere. Yes, the sky is free attitude. And thirdly, there are very limited, if any, restrictions on emissions of carbon. The solution to this can
be Carbon trading. A central authority (usually a governmental body)
sets a limit or cap on the amount of a pollutant that may be emitted.
The limit is allocated or sold to firms in the form of emissions permits which
represent the right to emit or discharge a specific volume of the specified
pollutant. Firms are required to hold a number of permits equivalent to their
emissions. The total number of permits cannot exceed the cap, limiting total
emissions to that level. Firms that need to increase their volume of emissions
must buy permits from those who require fewer permits. The transfer of permits is
referred to as a trade. In effect, the buyer is
paying a charge for polluting, while the seller is being rewarded for having
reduced emissions. Thus, in theory, those who can reduce emissions most cheaply
will do so, achieving the pollution reduction at the lowest cost to society.
Delivering renewable source of energy production is
another low carbon economy strategy. There might be a thought that developing
hydropower, solar, wind and biomass as energy producing sector would take off
jobs of some people who are already engaged in carbon producing sector.
Something must be arranged for the affected workers. But a research has shown
that a low carbon economy will produce more job opportunity than the one it
would destroy. A research group at the University of California, Berkeley
modeled a scenario where 20 percent of U.S. electricity demand was covered by
renewables by 2020. They estimated that such a scenario would lead to the
net creation of between 78,000 and 102,000 additional jobs – an increase of 91
to 119 percent compared to a situation where that same demand was covered by
coal or natural gas [3].
Another strategy for low carbon economy would be
increasing energy efficiency. Increasing energy efficiency would not only
contribute to reduction in emission of carbon but also secure energy. For
example, the manufacturer of cars of Germany and Japan has increased the
efficiency of the cars’ engine that the energy consumption of new cars has gone
down by 25-30% compared to the cars of 4-5 years ago. By 2020, energy
consumption of car would decrease by 50% of 2008. So, increasing efficiency of energy usage
will cut down the use of energy to large extent which would further cut down
the import of oil and gases. Reduction in import of oil and gases saves such a
high figure of budget that we can invest it in our own innovation and
technology. EU, China, Japan, India are getting much dependent on oil and gas.
USA is becoming completely dependent in oil and gas import and now are looking
for export.
There would be social equity as well. The divide
between the poor and the rich can be transparent if there is escalating price
of energy. Escalation of price would inflict a higher toll on lower-income
consumers than they do on the middle class and the wealthy. Improving energy
productivity would thus disproportionately ease the burden on the poor, helping
narrow the economic and social divide.
Low carbon economy is possible. The prevailing
technologies can reduce the emission of CO2 to a desired level. There is no
need of technological breakthrough by 2050. While these emerging technologies
will require a substantial investment flows, those investment will create jobs
and economic growth. One has to remember that what economists view as “costs”
in analyzing carbon abatement are for the most part investment in new capital
stock. The building of that capital stock creates jobs and if that capital
investment is financed over time, it can result in higher GDP growth.
Talking about my
country Nepal, it along with more than other 150 other countries, signed the
United Nations Framework Convention on Climate Change (UNFCCC) at the United
Nations Conference on Environment and Development (UNCED) held in Rio de
Janeiro in June 1992 [1]. Nepal ratified the Convention on 2nd May in 1994, and
this convention came into force in Nepal on 31st July in 1994. As a non- Annex
country, Nepal is not required to curtail the GHG emissions. However, it has an
obligation to prepare and periodically update the national greenhouse gas
inventory and submit “National Communications” to the UNFCCC. As a response to
this obligation, Nepal completed Initial National Communication to the
Conference of the Parties of the UNFCC in 2004 [2]. However the updates of the
greenhouse gas inventory in recent years is yet to be done.
According to the estimation of GHG emissions in Nepal,
the total contribution of the gases is very modest compared to other developing
and developed countries at present and it is not very likely that the emissions
will increase very much in the near future. Despite of the low emissions Nepal
has stepped forward to increase their economy which is independent of carbon.
One of its instances is the investment in micro
hydropower sector at local scale. Nepal is rich in water resources. Instead of
burning firewood for a source of energy, we’ve been promoting to develop micro
hydropower and biogas as a substitution. Of course the initial investment in
micro hydropower and biogas seems large but the benefits it would be reaping
later are greater. Since micro-hydropower would be an renewable source of
energy it would surely be an option for the firewood which emits carbon into
the atmosphere. As a matter of fact, we can be sure that there would be
declivity in the use of firewood. Forest and trees would provide a better air
quality and health. Food when prepared using firewood often leads to smoke
which are mainly dealt by the women and they are the most vulnerable group of
the locality. So, micro-hydropower would indirectly be benefitting the health
of the people. Apart from the health advantages, the water from the tailrace of
the hydropower plant can be diverted and be used for irrigational purposes.
This way the agricultural development would flourish in the locality and there
would be better food production. This further will lead to the increased food
security and preparedness during a disaster. The moment of drought can be
avoided through it as there will be facility for refrigeration too. Thus a low
carbon economy would lead towards a more sustainable development.
If the country choses to maintain its low-carbon status
smartly, while going ahead, this status would give it the all-needed head start
for massive economic development. An inspiration vision like “Zero Carbon Nepal”
(ZCN) can bring in technical knowledge, foreign direct investment as well as
foreign aid in much larger quantity, thereby providing the required impetus to
push the Nepali economy on a fast paced double digit growth. Besides, a vision
like ZCN, and branding Nepali products as ‘Made in Zero Carbon Nepal’ would
give an advantage to Nepali exports- currently almost dying. A vision of the
ZCN sort is the only way to get the country out of abject poverty, and put it
in the path of becoming a Developed Economy by 2030.
According to Ranjit Acharya, CEO, Prisma Advertising, “With the current low
industrial development, Nepal has very less contribution in the total global
carbon emission. This status can be carefully applied to build low-carbon
economy by developing a “Made in Zero Carbon Nepal” label for every Nepali
product which will not only make our economy strong but also help Nepal become
a preferred country for foreign investments.” [4]
Economic growth and carbon reduction need not be a two
opposing goals. By aiming towards a low carbon economy we not only protect the
threatening human existence due to climate change but also move towards a much
sustainable development. To attain this objective globally, all the developed
nations (USA and EU), powerful emerging economies (India and China) and the
developing nations (Non Annex countries like Nepal) should agree and work
accordingly.
References
[1] HMG Ministry of Population and
Environment, “Initial National Communication to the Conference of the Parties
of the United Nations Framework Convention on Climate Change,” 2004. Retrived
from http://unfccc.int/resource/docs/natc/nepnc1.pdf
[2] B. N. Oli and K. Shrestha,
“Carbon Status in Forests of Nepal: An Overview,” Journal of Forest and
Livelihood, Vol. 8, No. 1, 2009, pp. 62-66.
[3] Eric Beinhocker and Jeremy Oppenheim, “Economic opportunities in a low-carbon
world”. Retrived from http://unfccc.int/press/news_room/newsletter/guest_column/items/4608.php
[5] Jos Delbeke, “EU
Climate and Energy Policy – Moving to a competitive low carbon Economy”, 2013.
Retrived from: http://www.youtube.com/watch?v=tWd76xaiVbY
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