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

UN's Ban Ki-Moon calls climate change the moral challenge of our generation; OECD says costs of mitigation are manageable but Developed Countries should assume much of the cost
By Finfacts Team
Dec 12, 2007, 12:44

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UN Secretary-General Ban Ki-Moon addressing the United Nations Climate Change Conference in Bali, Indonesia, on Wed, Dec 12, 2007

144 ministers and high-level government representatives along with 6 heads of state gathered in Bali on Wednesday to begin the high level segment of the United Nations Climate Change Conference, in  Bali, Indonesia, which is expected to launch negotiations on a new global deal on climate change.

The conference, the thirteenth Conference of the 192 Parties to the United Nations Framework Convention on Climate Change (UNFCCC) and the third meeting of the 176 Parties to the Kyoto Protocol, is being attended by more than 11,000 people, making it the largest UN climate change meeting ever held.

Speaking at the opening of the high-level segment, UN Secretary-General Ban Ki-Moon told participants that the grim projections made by the scientists of the UN’s Intergovernmental Panel on Climate Change (IPCC) this year, including rising sea levels, more frequent and less predictable floods and severe droughts, meant the “the time to act is now.”

Calling climate change “the moral challenge of our generation,” the UN Secretary-General said “the eyes of the world” were on negotiators meeting in Bali. “Succeeding generations depend on us,” he said. “We cannot rob our children of their future.”

UNFCCC Executive Secretary Yvo de Boer spoke of the need to translate the IPCC’s science into clear policy. "Business is ready to move into the low-emissions era, but needs the appropriate policy framework from governments to do so,” he said. Ministers could do this by launching formal negotiations at Bali, agreeing on an ambitious agenda and setting 2009 as the deadline for negotiations.

UN Secretary-General Ban Ki-Moon said there was an emerging consensus on the building blocks of a climate agreement and that a new deal must be comprehensive, involving all nations.

He said that developed countries needed to “continue to take the lead on curbing emissions” and stressed the importance of acting globally, whilst providing incentives for countries, businesses, and individuals to act on climate change.

“ Our atmosphere can’t tell the difference between emissions from an Asian factory, the exhaust from a North American SUV, or deforestation in South America or Africa,” he said.

On Tuesday, the conference was told that the world needs to build 30 nuclear power stations and the equivalent of two Three Gorges dams every year to prevent dangerous climate change, the International Energy Agency said.

It also said that the world needs to build 13,000 wind turbines and 40 coal and oil power stations fitted with carbon capture and storage technology each year between 2013 and 2030.

Speaking on the 10th anniversary of the Kyoto climate change agreement, Nobuo Tanaka, executive director of the Agency, said he didn't feel it was time to celebrate.

He said Kyoto's 5 per cent reduction target on 1990 levels by 2010 was getting "less and less relevant, unfortunately" because energy related carbon dioxide emissions are expected to rise 60 per cent by 2030.

Finfacts Report: International Energy Agency calls for mitigation of climate change now by realising huge potential of energy

Earlier in the week, business leaders called for a firm framework, which is a necessary basis for significant climate change-related investment.

Finfacts Report:Bali Global Business Day told that business needs firm targets to respond to climate change; UN report highlights increased potential for conflict in many regions

An illustration of the problems for the business sector is highlighted by Bloomberg News in a report today in which it says that German Environment Minister Sigmar Gabriel is promoting a plan to cut emissions blamed for global warming by 40 percent at this week's climate talks in Bali, Indonesia. At home, RWE AG is building three power plants fired by coal, the fuel that produces the most greenhouse gases.

While Germany proposes to reduce carbon-dioxide emissions by encouraging the use of renewable energy such as biofuels and windfarms, more than half the new power stations planned for Germany will be fueled by coal, according to Essen-based RWE, the nation's second-biggest utility.

Power companies are choosing coal, which produces twice as much carbon-dioxide as natural gas, over cleaner fuels because world leaders have failed to agree on a strategy for reducing emissions. Without incentives to build less-polluting plants, utilities are guessing about which fuels will be most profitable and delaying investments until an agreement is reached.

Cost of tackling climate change should be shared more fairly, says OECD Secretary-General

OECD Secretary-General Angel Gurría
Most of the action to address climate change will need to take place in developing countries, but developed countries should assume much of the cost, said OECD Secretary-General Angel Gurría today in a speech at the United Nations Climate Conference in Bali.

“We must find a way to share the burden of the costs of climate change action that takes into account the level of economic development of nations,” he said. “We need to create a sound economic footing for the post-Kyoto framework.”

Gurría, a former Mexican Government Minister, said the policies needed to tackle climate change were already available, but needed to be implemented efficiently and effectively. The policy “toolkit” could rely heavily on market-based instruments, such as taxes or a global emission trading system, also known as a cap and trade system, complemented by regulations and incentives for innovation.

“By agreeing more ambitious caps, in the context of a global trading system, developed countries could carry a relatively greater financial responsibility than developing countries,” he said. “And enabling trading in emission permits would encourage mitigation action to take place where it is cheapest and so keep the global costs low.”

OECD analysis shows that the costs of limiting climate change are manageable: the cost of cutting greenhouse gas emissions significantly by 2050 to reach the more ambitious targets being discussed internationally would be equivalent to global GDP growth slowing by 0.1 percentage points per year through to 2050. If a harmonised global carbon tax was implemented, OECD GDP would fall by only 0.2% in 2030 and 1.1% in 2050 but in Brazil, Russia, India and China GDP would decline five times as much – 1.4% of GDP in 2030 and 5.5% in 2050.

This highlights the importance of having a system that shares the burden of the cost of action equitably. With a global cap and trade system, for example, the cost to Brazil, Russia, India and China could fall by more than half, given the increased responsibility for emission reductions taken up by developed nations. The overall global cost would remain the same.

He warned that with less efficient policies that, for example, exempted some of the most energy-intensive industries or excluded some countries from action, “it would not only become more difficult to achieve the more ambitious goals of emission reductions, but the costs of doing so would also go up significantly.”

He urged countries that continued to subsidise the “good” solutions to climate change, rather than tax the “bad” ones, to think again.

“This is a very costly choice,” he said, “because it tends to increase the costs of reducing greenhouse gas emissions. Subsidising a particular kind of good behaviour also risks locking in technologies that may later be considered inefficient. Taxing bad behaviour, on the other hand, provides a consistent incentive for increased efficiency and innovation.”

“Our analysis suggests, for example, that current biofuels production is generally not economically viable in OECD countries without big subsidies, and the environmental benefits are uncertain and may be much smaller than anticipated.”

Gurría encouraged countries to continue working closely with the OECD on the economics of climate change and welcomed the invitation from finance ministers at their meeting to continue discussions at the OECD in the near future. The economics of climate change will be the subject of next year’s OECD Ministerial Meeting on 4 and 5 June 2008, involving finance and economics ministers from OECD and other countries.


Finfacts Climate Change Reports - access on right-hand column of home page

© Copyright 2007 by Finfacts.com

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