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