News
September 24 2015

September 23-24, 2015 – Columbia University, New York City: FEEM at the 2015 International Conference on Sustainable Development



FEEM will contribute three papers to the 2015 International Conference on Sustainable Development, which will be focused on the theme “Implementing the SDGs: Getting Started”. The aim of the conference is to bring together stakeholders from government, academia, the United Nations, international agencies, NGOs, and grassroots organizers to identify and share practical, evidence-based solutions that can support the Sustainable Development Goals (SDGs), which will be agreed upon at the United Nations immediately following the conference:

September 23, 2015:

FEEM junior researcher Carlo Orecchia will present "The cost of climate stabilization in Southeast Asia, a joint assessment with dynamic optimization and CGE models" by Francesco Bosello, Giacomo Marangoni, Carlo Orecchia, David Raitzer and Massimo Tavoni

The  present  study  aims  to  assess  the  implications  for  energy  consumption,  energy   intensity  and  carbon  intensity  in  the  Southeast  Asia  region  of  a  set  of  short-term  and  long-term  decarbonization  policies  characterized  by  different  degrees  of  ambition  and  international  cooperation.  

Southeast  Asia  is  at  a  time  one  of  the  most  vulnerable  region  to the  impacts  of  a  changing  climate,  with  millions  of  its  inhabitants  still  trapped  in  extreme  poverty  without  access  to  energy  and  employed  in  climate-sensitive  sectors,  and,  potentially,  one  of  the  world’s  biggest  contributors  to  global  warming  in  the  future.  Indeed,  in  recent  decades,  the  region’s  growth  in  emissions  has  been  more  rapid  than  in  any  other  area  of  the  world,  also  fostered  by  an  extensive  use  of  fossil  fuel  subsidies  and  economic  incentives  for  deforestation.  

Fortunately,  major  Southeast  Asian  countries  are  also  implementing  policies  to  improve  their  energy  and  carbon  efficiency  and  are  discussing  if  and  how  to  extend  these  further.  This  study  firstly  offers  an  insight  on  the  costs,  not  only  in  terms  of  GDP,  but  also  in  energy  consumption  possibility,  that  five  developing  Southeast  Asian  economies  (Indonesia,  Malaysia,  Vietnam,  the  Philippines  and  Thailand)  could  experience  in  2020  following  the  implementation  of  their  national  de-carbonization  targets.  Then  focuses  more  on  the  long  term  investigating  three  scenarios:  a  fragmented  regime  where  countries  continue  with  uncoordinated  nationally-determined  commitments  (i.e.  Copenhagen  pledges  and  INDC),  a  coordinated,  but  mid-ambition  global  de-carbonization  goal  aiming  at  stabilizing  GHG  concentration  at  650  ppm,  and  one  more  ambitious  aiming  to  a  500  ppm  stabilization.  

The  analysis  applies  two  energy-climate-economic  models.  The  first,  the  fully  dynamic  Integrated  Assessment  model  WITCH,  is  more  aggregated in  the  sectoral  and  country  representation,  but  provides  a  detailed  technological  description  of  the  energy  sector.  The  second,  the  ICES  Computable  General  Equilibrium  model,  offers  a  richer  sectoral  breakdown  of  the  economy  and  of  international  trade  patterns,  but  is  less  refined  in  the  representation  of  technology. The  joint  application  of  these  two  complementary  models  allows  capturing  of  key  aspects  of  low carbon  development  paths  in  Southeast  Asia.

Particular  care  has  been  devoted  to  in  both  models  to  describe  land use  emissions  from  deforestation  and  peat  oxidation  as  well  as  abatement  opportunities  from  averted  deforestation  through  reducing  emissions  from  forest  degradation  and  deforestation  (REDD).

The study finds that to minimize long-term costs, Southeast Asian  emissions need to decline by 20%–25% compared to the baseline in 2025  and by 60% by 2050. Decarbonization of the energy sector is found to derive from increased efficiency of energy use, replacement of  carbon-intensive fuels with cleaner alternatives, and reduction in  energy consumption. However, the relative importance of these three components depends largely on the availability of low-carbon technological options. Up front investments in low carbon technologies prove to be crucial to keep decarbonization costs manageable and to avoid drastic reduction in energy consumption, especially in the 500 ppm stabilization and after 2035. On the contrary,  arrangements to avoid deforestation and the possibility to use avoided deforestation credits
in the carbon market prove to be critical to reduce decarbonization costs especially in Indonesia in the mid-term.
 

September 24, 2015:

Prof. Carlo Carraro, FEEM Research Director, will present  "Assessing Sustainable Development Goals" by Carlo Carraro, Lorenza Campagnolo, Fabio Eboli and Luca Farnia

Some  challenges  need  to  be  addressed  in  order  to  help  ensure  the  effectiveness  of  the  overall  strategy  lying  behind  the  UN  Post - 2015  Sustainable  Development  Goals  (SDGs),  building  upon  the  previous  Millennium  Development  Goals  (MDGs)  experience.  The  first  is  to  strengthen  data  collection  and  monitoring,  by  connecting  international  institutions  identified  as  responsible  for  data  gathering  with  national  agencies.  The  second,  related  to  the  main  conclusion  of  2014  MDGs  Report  - that  acknowledges  substantial  progress  in  2000-2015  but  claims  for  failure  in  fully  achieving  most  targets  - is  to  establish  a  consistent  overarching  policy  framework  to  fulfil  SDGs  matching.

The  present  paper  proposes  a  new  methodology  to  perform  an  ex-ante  assessment  of  the  SDGs,  such  to  anticipate  potential  failures  by  2030  and  acting  promptly.  The  analysis  is  based  upon  the  employment  of  a  recursive-dynamic  macro-economic  computable  general  equilibrium  model  extended  with  a  number  of  relevant  social  and  environmental  indicators.  The choice  of  an  economy-wide  model  allows  considering  changes  in  relevant  socio-economic  drivers  (GDP  per  capita,  population,  prices,  outputs,  international  trade)  that  constitute  the  actual  landscape  in  which  agents  (households,  firms)  pursue  their  own  objectives  (wellbeing,  profit).  Furthermore,  this  model-based  approach  can  capture  positive  and  negative  feedbacks  of the evolution  of  the  global  economic  system  on  social  and  environmental indicators  and  dimensions.

The  analysis  starts  with  a  backward  overview  of  current  trends  of  SDGs  worldwide,  to  understand  the  main  reasons  for  the  still  existing  criticalities. Then,  the  model-based  framework  will  allow  characterizing  the  state  of  the  world  up  to  2030  across  different  scenarios.  In  fact,  linking  indicators  dynamics  to  the  socio-economic  context  will  allow  the  careful  and  consistent  definition  of  their  future  evolution  in  both  business-as-usual  (BAU)  and policy  constrained  scenarios.  The  BAU  scenarios traditionally  depict  the  development  of  the  socio-economic  systems  without  considering  the  introduction  of  new  policies.  They  work  as  reference  benchmarks,  as  they  can  highlight  in  advance  which  and  where  SDGs  do  not  reach  the  2030  target  level  or  even  worsen  compared  to  the  present.  Policy  counterfactuals  designed  to  fill  the  gaps  will  then  provide  the  ex-ante  assessment  of  costs  and  benefits  of  planned  actions  and  strategies  aimed  to  achieve  SDGs,  as  well  as  their  feasibility  and  potential  trade-offs/interactions  with  other  sustainability  dimensions  not  directly  considered  by  the  policy  intervention.  Possibly,  a  comprehensive  composite  index  will  be  constructed  to  measure how  countries’  overall  sustainability  will  change  over  time,  thereby  providing  a  world  sustainability  ranking  across  scenarios.
 

FEEM junior researcher Elisa Delpiazzo will present "Analyzing the coordinated impacts of climate policies for financing adaptation and development actions" by Elisa Delpiazzo, Ramiro Parrado and Gabriele Standardi

The  global  economy  of  the  21st  century  will  unequivocally  face  long-term  challenges  such  as  demographic  changes,  globalization,  as  well  as  climate  change.  Development  strategies  have  to  address  that  phenomena  coordinating  efforts  from  private  and  public  agents  and  mainstreaming  policies  in  search  of  synergic  outcomes.  Concerns  about  fiscal  sustainability  and  fiscal  implications  of  these  long-term  processes  for  the  long  run  have  been  put  forward  for  discussion  since  the  beginning  of  the  century  (Heller,  2003).  These  processes  will  open  new  dimensions  in  fiscal  planning  given  that  they  point  towards  concepts  such  as  anticipation,  mitigation,  and  adaptation. 

Many  factors  may  threat  fiscal  sustainability.  Aging  population,  welfare  state  reforms,  rigidities  of  labor  markets,  and  the  recovery  from  the  global  crisis,  have  contributed  to  robust  debt  levels.  Climate  change  is  rapidly  growing  as  a  challenge  for  the  21st  century  but  could  also  provide  good  reasons  to  address  all  the  above-mentioned  issues  in  a  sustainability  framework. 

Current  and  future  policies  must  deal  with  mitigation  and  adaptation  to climate  change.  This  brings  a  window  of  opportunity  to  include  these  actions  in  a  development  strategy  that  can  benefit  society  in  the  future.  While  adaptation  policies  will  address  the  expected  impacts  that  cannot  be  avoided  for  the  future,  mitigation  policies  will  help  to  decrease  greenhouse  gas emissions,  and  therefore  reduce  future  impacts  of  climate  change.  From  the  development  point  of  view,  mitigation  policies  could  help  to  induce innovations  for  a  green  economy  and,  most  importantly,  raise  government  revenues,  which  can  then  be  used  to  finance  adaptation  policies  as  well. Therefore,  if  governments  start  taking  into  account  the  implications  of  long  term  challenges  for  development  and  not  only  looking  at  short  run implications,  their  actions  could  pave  the  road  for  a  new  sustainability paradigm  in  the  near  future.

Many  are  the  climate  change  impacts  governments  will  have  to  focus  on.  From  sea  level  rise  to  extreme  weather  events  (cyclones,  hurricanes,  storms)  and  these  events  will  affect  the  world  differently.  Developing  countries  have  a  higher  vulnerability  to  climate  change  and  in  addition,  they  face  very important  challenges  as  poverty  reduction,  energy  access,  education  and  health. 

This  paper  focuses  on  the  implications  of  climate  policies  on  fiscal budgets, and  on  the  financing  of  adaptation  and  development  actions  using  revenues  from  a  specific  policy  such  as  a  carbon  tax  that  could  raise  enough  resources  to  foster  a  sustainable  development  while  reducing  emissions.  Revenues  raised  in  developed  countries  are  pooled  in  an  “Adaptation  for  Development”  fund  to  provide  additional  resources  to  developing  countries.  Two  impacts  of  climate  change  are  analyzed.  The  first  one  is  sea  level  rise  that  requires  important  adaptation  investments  to  cope  with  future  impacts.  The  second refers  to  extreme  flood  events  that  could  bring  several  damages  that  could also  be  avoided  with  anticipatory  adaptation  investments.

The  analysis  is  performed  with  a  multi-region  and  multi  sector  computable  general  equilibrium  model  modified  to  enhance  the  public  sector  representation  as  well  as  to  include  mitigation  policies  and  adaptation  expenditures  in  anticipatory  actions  relying  on  infrastructure investments.


Fondazione Eni Enrico Mattei

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