Transitioning to a Greener Infrastructure
The Asian Economic Forum is embarking on a journey to explore how economic policies in Asia could meaningfully impact Climate Change.
Our immediate focus of conversations will be initially in South East Asia.
Climate Change Economics is the name of our Policy Group wherein we are embarking on a series of discussions that encompass the challenges associated with Climate Change in South East Asia.
The next subsequent stakeholder discussion on Climate Change Economics is to be held in Hanoi, Vietnam – dates and location to be announced soon.
The first of these discussions took place on Tuesday, June 4th, 2019 in association with the Myanmar Economic Forum in Nay Pyi Taw, Myanmar.
The subject of this first discussion was:
Energy diversification & reforms as drivers of stability & peace
We are extremely grateful to H.E. Mrs. Dorothee Janetzke-Wenzel, The Ambassador of the Federal Republic of Germany for her valuable perspectives and her presentation on “ENERGIEWENDE – Transformation of the German Energy System”
Additionally, to highlight valuable data, insights and perspectives to policy makers within the Asia geography and beyond, we are also in the process of bringing together a small group of domain experts and practitioners as Non-Resident Fellows to the Asian Economic Forum.The first of these Non-Resident Fellows will be collaborating from within the:
Climate Change Policy Group & Renewable Energy Policy Group at Climate Change Economics
Our objective is to explore via Dialogue with a multitude of stakeholders (to include the private sector) the positive impacts that potential policies could have for Sustainable Economic Development and measurable advancements for the transition of the economy away from carbon to enable meaningful reduction in carbon emission to achieve results that help limit the global climate rise to 1.5 degrees Celsius as highlighted by the UNFCCC.
While much of the world awaits anxiously to see the impacts and results from the Paris Climate Change Agreement, which came out of the COP21, the 21st Conference of Parties of the UNFCCC (United Nations Framework Convention on Climate Change), a commitment by national governments initiated in Paris in 2015 to review their progress and rachet up the ambition of national climate action plans, known as Nationally Determined Contributions) the outcome in policy commitment has been unevenly distributed amongst the major industrial economies.
While politically much attention is centered on the US, other economies such as Germany have made rapid strides in their energy transitions. While China makes massive capital and policy commitments towards the renewable energy sector it yet remains the worlds largest carbon dioxide emitter.
While energy consumption behavior has not changed in a meaningful sense in almost all countries across the globe (with a few handful exceptions like the Nordic countries, Germany and Morocco to name a few) developing and emerging market countries globally are also beset with challenges in their economic policy formulation as faced by the two most populous counties in the world, i.e. China and India.
How should a country develop policy to balance the needs of their populations to have upward mobility via the advancements brought by basic power and energy delivery and sustainable development within the context of their energy mix and energy security.
Often escaping this conversation is also the need for smart economic policy on investments in infrastructure (to include discussion on energy grids, efficient production of steel and cement), public transportation and the need for forest preservation.
What is the role of the private sector in this discussion and how can they play a role in larger road map set by governments?
What is the role of the capital markets and can credit / debt markets be part of the solution?
Can governments (sovereign and provincial) in emerging countries borrow effectively from global markets and not be penalized for making longer term investments that are complimentary to the goals of the UNFCCC?
These are some of the questions that we seek to initiate discussions around the subject matter of Climate Change Economics.
In Germany the term Energiewende (“energy transition”) designated a significant change in energy policy. The term encompassed a reorientation of policy from demand to supply and a shift from centralized to distributed generation (to include those, producing heat and power in very small cogeneration units), which was aimed to replace overproduction and avoidable energy consumption with energy-saving measures and increased efficiency.
The key policy document outlining the Energiewende was published by the German government in September 2010, some six months before the Fukushima nuclear accident.
Germany is today known as the world’s first major renewable energy economy with an estimated 38% of gross electricity consumption being provided by renewables (on- and off-shore wind, solar PV, biomass and hydro) and as it edges towards its national target of 65% renewable energy by 2030. Notably it pledges to close its last remaining nuclear plants by 2022.
In the United States most dramatically with the change of leadership in the US Congress in 2019, the policy discussion of a Green New Deal has been introduced into the mainstream by environmental activists and lawmakers alike.
Conversations of an all-out national mobilization to decarbonize the economy has take center stage especially amongst those that see climate change as an existential threat.
What role will markets have to guide the transition away from carbon? What will a carbon tax look like? What role with the government play in undertake in a massive public spending bill and what direction will it set for private markets to allocate the necessary resources of innovation and capital to deliver on the new Green New Deal?
While the United States by virtue of being the largest economy in the world with access to the deepest financial markets and the bastion of innovation can single handily set an example for the world to follow a new set of economic policies addressed specifically for Climate Change.
We at the Asian Economic Forum look to expand on the policy implementation and benefits that have impacted the German economy over the past decade.
Similarly we look to also expand on some of the Green New Deal discussions taking place in the United States in trying to bringing an Asian context to the same, specifically as it relates to Climate Change Economics and seeing what commonalities and similarities can we learn from the challenges faced and the solutions going forward.
The United Nations Framework Convention on Climate Change (UNFCCC) is an international environmental treaty adopted at the Earth Summit in Rio de Janeiro in 1992.
The UNFCCC objective is to “stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system”.
The framework sets non binding limits on greenhouse gas emissions for individual countries and contains no enforcement mechanisms. Instead, the framework outlines how specific international treaties (called “protocols” or “Agreements”) may be negotiated to specify further action towards the objective of the UNFCCC.
The UNFCCC has 197 parties as of December 2015.
The parties to the convention have met annually from 1995 in Conferences of the Parties (COP) to assess progress in dealing with climate change.
In 1997, the Kyoto Protocol was concluded and established legally binding obligations for developed countries to reduce their greenhouse gas emissions in the period 2008–2012.
The 2010 United Nations Climate Change Conference produced an agreement stating that future global warming should be limited to below 2.0 °C (3.6 °F) relative to the pre-industrial level.
The Protocol was amended in 2012 to encompass the period 2013–2020 in the Doha Amendment, which as of December 2015 had not entered into force.
In 2015 the Paris Agreement was adopted, governing emission reductions from 2020 on through commitments of countries in Nationally Determined Contributions, lowering the target to 1.5 °C. The Paris Agreement entered into force on 4 November 2016.