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News : International Last Updated: Dec 19th, 2007 - 13:17:15

Rising global greenhouse gas emissions will cost more than $200bn a year to return to today’s level of emissions by 2030
By Finfacts Team
Aug 23, 2007, 08:48

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The United Nations Framework Convention on Climate Change secretariat on Wednesday put forward in detail (5mb pdf report) how much it would cost to return emissions to today’s levels by 2030, which may not be be sufficient to avoid some of the adverse consequences of climate change.

Scientists say that annual greenhouse gas emissions must peak by 2015 to 2020 in order to avoid catastrophic consequences.

The UNFCCC found that about $148 billion of projected annual investment in the energy generation sector should be channelled to renewables, nuclear energy, hydropower and systems to capture and store carbon dioxide, in order to cut emissions to the desired level.

The UN also found that industry must invest $36 billion a year in energy efficiency by 2030 to achieve such a result.

In addition, investment of between $35 billion and $45 billion a year would be needed on research and development into new technologies. This would mean government re­search and development budgets would need to double, and private sector investment – which the UN said had fallen in recent years – would need to be stepped up.

About $51bn a year will need to be spent making buildings more efficient, and $88bn to improve transport.

The global additional investment and financial flows of $200–210 billion will be necessary in 2030 to return global GHG emissions to current levels (26 Gt CO), see annex 5, table 6 of the report. In particular:

  • For energy supply, investment and financial flows of about $67 billion would be reduced owing to investment in energy efficiency and biofuel of about $158 billion. About $148 billion out of $432 billion of projected annual investment in power sector would need to be shifted to renewables, CCS, nuclear energy and hydropower. Investment in fossil fuel supply is expected to continue to grow, but at a reduced rate;

  • For industry, additional investment and financial flows are estimated at about $36 billion. More than half of the additional investment is for energy efficiency, one third for installation of CCS and the rest for reduction of non-CO2 gases, such as N2O and other high GWP GHGs;

  • For buildings, additional investment and financial flows amount to about $51 billion. Currently commercial and residential energy efficiency investment comes from building owners and is financed domestically;

  • For transportation, additional investment and financial flows amount to about $88 billion. Efficiency improvements for vehicles and increased use of biofuels are likely to require government policies, but the investment would come mostly from the private sector

  • For waste, additional investment and financial flows are estimated at about $1 billion. Capture and use of methane from landfills and wastewater treatment could reduce emissions by about 50 per cent in 2030 mainly in non-Annex I Parties;

  • For agriculture, additional investment and financial flows are estimated at about $35 billion. Non-CO2 emissions from agriculture production could be reduced by about 10 per cent at cost of $ 20 billion in 2030. With a concerted international effort and an annual investment of about $ 15 billion agroforestry could be expanded at a rate of about 19 million ha per year by 2030;

  • For forestry, additional investment and financial flows are estimated at about $21 billion. An indicative estimate of the cost of reducing deforestation and forest degradation in non- Annex I Parties to zero in 2030 is $12 billion. The estimated investment and financial flows in 2030 to increased GHG removals by sinks through SFM is $8 billion and the estimated investment and financial flows needed for afforestation and reforestation is $0.1– 0.5 billion;  

  • For technology R&D and deployment, additional investment and financial flows are estimated at about $35– 45 billion. Government spending on energy R&D worldwide has stagnated, while private sector spending has fallen. Government budgets for energy R&D and support for technology deployment need to double, increased expenditures in 2030 are expected at $10–30 billion respectively.

Yvo de Boer, Executive Secretary of the United Nations Framework Convention on Climate Change on Wednesday defended the workings of the Kyoto protocol, and its parent treaty the UNFCCC, which he said was helping to cut emissions. Contrary to the claims of the treaty’s opponents, he said, developing countries did have obligations to reduce their emissions, though they did not face the stringent targets faced by developed countries.

In another report, the UN Environment Programme (copy of report not available online at time of our posting) said that chemicals companies in countries such as China, India, and brokers buying and selling credits generated from such projects, had been the main beneficiaries of the Kyoto Protocol. These plants receive carbon credits for destroying a powerful greenhouse gas known as HFC-23.

However, the cost of destroying the gas is much lower than the price the credits can make on the open market, enabling the factories and brokers who set up the deals can profit substantially. The report said: “Monies flowing from the sale of Certified Emission Reductions [carbon credits] could be up to 10 times higher than the costs [of destroying the gas].”

Factories in China, and others in India, Mexico, Argentina and South Korea, will earn up to 10 times more money than they actually need to destroy the powerful greenhouse gases, the report found.  (see news report)

The UN agency suggested that "national levies are applied to limit the financial gain of individual manufacturers," after the first cycle of project funding ends in seven years.

The future of the Kyoto protocol will be discussed in Bali in December.

Next month, Ban Ki-moon, UN secretary-general, will host a meeting of heads of state and governments in New York on climate change.

Fossil fuels are projected to remain the dominant sources of primary energy globally

Their share of global primary energy mix is projected to rise slightly under the reference scenario from 80 per cent in 2004 to 81 per cent in 2030. Global primary energy demand under the reference scenario is projected to increase by 1.6 per cent per year between 2004 and 2030, reaching 17.1 billion tonne of oil equivalent (Btoe), 53 per cent (6 Btoe) more than in 2004. Over 70 per cent of the increase in global primary energy demand between 2004 and 2030 comes from the developing countries. The increase in the demand of developing countries results from their rapid economic and population growth. Industrialization and urbanization boost demand for commercial fuels.

Global electricity demand is projected to grow at 2.6 per cent per year on average. This is slower than the GDP growth rate of 3.4 per cent and faster than the total primary energy supply of 1.6 per cent. Developing Asia is the main engine of electricity demand growth. Though world electricity generation almost doubles by 2030, the generation mix remains relatively stable.

© Copyright 2007 by Finfacts.com

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