Fritz Hinterberger, trade and climate what matters

Trade and Climate: what matters ?

Dr. Friedrich Hinterberger

Brussels, 19th Sept 2018

Trade and CO2 emissions

Will the increase of international freight-related CO2 emissions jeopardise the Paris Climate Agreement?

No! But: â–ş

Trade has a major influence on environment and climate!

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Trade and CO2 emissions ►

Trade has a major influence on environment and climate!

Why? ►

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Regulations regarding CO2 emissions in industrialised countries are often associated with an export of CO2-intensive activities into developing countries Outsourcing manufacture processes from the rich to the poor parts of the world  Carbon leakage 3

Trade and CO2 emissions â–ş

Carbon footprint (consumption-based approach): CO2 emissions that occur along the entire value chain.

This includes the international production and transport chains to produce products imported to a country (but not just transport emissions)

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Production-based approach: CO2 emissions that occur during production in a country.

This includes the emissions of goods and services being exported.

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Trade and CO2 emissions â–ş

Production-based emissions vs. consumption-based emissions (CO2 footprint) in 2017 (rounded) Country

France United Kingdom Bulgaria Denmark EU27 China

CO2 emissions

CO2 footprint

Deviation

in Mio. tons

in Mio. tons

in %

490 560 50 70 4000 8800

570 620 30 50 4200 7850

+16 +10 -40 -29 +6 -10

Source: CO2 footprint: calculations with GINFORS

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The challenge ►

CO2 emissions are related to other resources

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By 2050 9.5 billion people will need resources (energy, material, land, water) for food and ‘westernised’ patterns of consumption Rapid increase in demand for resources of all kinds Rapid price increases of all such commodities The incidence of poverty may increase substantially Consumers have less disposable income to spend on other consumer goods such as computers, cars, ...

Economic growth comes under pressure Unemployment is likely to increase.

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“Ressourcenwende” ► ►

Technical solutions (e.g. new engines) are not enough Comprehensive “Ressourcenwende” is needed 

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reduce – reuse – recycle materials

If we reduce, reuse and recycle (raw) materials, fewer of these heavy and CO2 intensive raw materials need to be shipped around the world.

Further efforts needed to decrease resource use Policy measures  Right prices for (international) freight transport  Abolishing direct and indirect subsidies for air traffic  Kerosene tax 7

POLFREE ► ► ► ►

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Looking back from 2050 Reference scenario: Business as Usual 3 alternative scenarios: Global Cooperation, EU goes ahead, Civil Society Leads Common targets: 5 tons of raw material consumption (RMC)/cap Cropland Footprint – 20% Water Exploitation Index <20% Greenhouse gases -80% No nuclear phase-out: focus on carbon phase out – renewable/nuclear relation remains the same 8

Not an option: Business as Usual ►

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By 2050 9.5 billion people will need resources (energy, material, land, water) for food and ‘westernised’ patterns of consumption Rapid increase in demand for resources of all kinds Rapid price increases of all such commodities The incidence of poverty may increase substantially Consumers have less disposable income to spend Economic growth would come under pressure, and decrease from current levels Unemployment would also likely increase. 

A 4-6 DEGREES WORLD!!! = by no means sustainable 9

1st alternative: Global Cooperation ► ► ► ► ► ►

Coordinated action of all countries for resource efficiency and decarbonisation Transition to a resource-efficient and low-carbon economy requires significant innovations, Incentives for the private sector to invest more in research and in innovation on resource efficiency International organisations are key actors Lifestyles and preferences are largely led by external price signals International standards on products ensure that the price of goods reflect their cost in environmental, humanitarian and resource terms 10

2nd alternative: EU goes ahead ►

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EU pursues a low-carbon and resource-efficient economy, non-EU countries introduce climate polices of low ambition.

Resource efficiency is key to boost Europe’s competitiveness and protect against potential climate change impacts.

All Europeans live in comfortable, zero-carbon homes Zero carbon urban transportation by 2050.

Electrification of the energy system (generated almost entirely by low- and zero-carbon sources) is

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3rd alternative: Civil Society Leads! ►

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NGOs and businesses take the lead in developing a low-carbon, resource efficient economy in Europe Health, happiness and an individual’s ecological rucksack are key indicators of progress (instead of GDP) Combination of formal and informal employment Reduction of working hours, more equal distribution of income and wealth and more years of work Social and technical innovations are important 12

POLFREE experience if “EU goes ahead” ►

A combined „Ressourcen- und Energiewende“ in the EU would be an overall benefit for growth and jobs …

►

GDP:

+ 50%

Jobs:

+ 3.7 Mio. (until 2050 compared to BAU)

(until 2050 compared to 2015)

But: Some (usually well-organized) sectors tend to loose 13

POLFREE experience if “EU goes ahead” ►

A combined „Ressourcen- und Energiewende“ in the EU would be an overall benefit for the environment CO2:

-76% (until 2050 compared to 1990)

RMC:

from 12 to 5 tons per capita (until 2050 compared to 2000)

Cropland use:

-31% (until 2050 compared to 2000) 14

POLFREE experience if “Civil society leads” ►

Even „zero growth“ can create jobs, while well-being would be shifted to non-material sources GDP: +6 % (in 2050 compared to 2015) Jobs:

+17 Mio (in 2050 compared to BAU)

CO2 :

-70%

(in 2050 compared to 1990)

Economic consumption/capita: ►

level of 1995!

But: Possible shifts to other parts of the world

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Outlook â&#x2013;ş

These results also hold for a complete phase-out of nuclear energy

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an update will be presented at

www.growthintransition.eu 16

Thank you very much for your attention!

Friedrich Hinterberger

POLFREE.SERI.at www.SERI.at