Climate Change and Development The cement industry

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Climate Change and DevelopmentThe cement industry

• Robert Watson
• Chief Scientist, World Bank
• IFC
• June 10, 2004

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Climate Change

• Climate change is a development issue, which
  threatens poverty alleviation, e.g
• livelihoods of the poor
• human health
• security
• Climate change is an inter- and
  intra-generational equity issue
• industrial countries are primarily responsible
  for causing climate change, but developing
  countries and poor people in developing countries
  are most vulnerable
• a key question is what is an equitable
  allocation of GHG emissions rights?
• the actions of today will affect future
  generations

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Most of the Observed Warming of the Last 50 Years
is Attributable to Human Activities
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The Global Climate of the 21st Century
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Climate Change and WEHAB

• Human-induced climate change is projected to
• W Decrease water availability and water quality
  in many arid- and semi-arid regions increased
  risk of floods and droughts in many regions
• E Decrease the reliability of hydropower and
  biomass production in some regions
• H Increase the incidence of vector- (e.g.,
  malaria and dengue) and water-borne (e.g.,
  cholera) diseases, as well as heat stress
  mortality, threats nutrition in developing
  countries, increase in extreme weather event
  deaths
• A Decrease agricultural productivity for almost
  any warming in the tropics and sub-tropics and
  adverse impacts on fisheries
• B Adversely effect ecological systems, especially
  coral reefs, and exacerbate the loss of
  biodiversity

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The Kyoto Protocol

• Ratification requires 55 countries and 55 of
  industrialized country emissions Europe, Japan
  and Canada have ratified and are providing moral
  and political leadership the Russian Federation
  have committed to ratification, but given mixed
  signals recently - the US and Australia are
  isolated in refusing to ratify the Kyoto Protocol
• The US stated that the Kyoto Protocol is flawed
  policy because it was neither fair nor effective
  and not in the best interests of the US
• scientific uncertainties Article 3
  (precautionary principle)
• high compliance costs inconsistent with IPCC
• ineffective without the participation of the
  large developing countries
• Possible parallel activities by the US,
  especially by the private sector and the States

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Stabilization of atmospheric concentrations of
CO2 will require emissions reductions globally
These dates are associated with CO2 stabilization
alone stabilization of CO2 equivalent
concentrations need to occur even earlier because
of the contribution of the non- CO2 greenhouse
gases
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There is a wide band of uncertainty in the amount
of warming that would result from any stabilised
concentration of greenhouse gases

• Temperature change relative to 1990 (C)

Temperature change relative to 1990 (C )
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Temperature change at equilibrium
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Temperature change in the year 2100
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0
0
450
550
650
750
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450
550
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Eventual CO2 stabilisation level (ppm)
Eventual CO2 stabilisation level (ppm)
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Establish a Long-term Target

• Limit the rate of change of global mean surface
  temperature to 0.20C per decade
• Limit the equilibrium temperature change to 20C
• This will require limiting the atmospheric
  concentration of carbon dioxide to about 450ppm,
  certainly no higher than 550ppm
• This recognizes that the other GHGs are above
  their pre-industrial levels
• This optimistically assumes that the climate
  sensitivity factor is in the middle or lower end
  of the range (1.5-4.50C)
• The technologies of today can put us on the right
  track until about 2050, but significant
  improvements will be needed after this time,
  hence the need for an aggressive energy R_at_D
  program
• Such a target will send a strong signal to the
  private sector and governments that there will be
  a market for technologies that efficiently
  produce and use energy

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Technologies and Policies Exist to
Reduce GHG Emissions

• Significant technical progress has been made in
  the last 5 years (e.g., wind turbines, hybrid
  engine cars, fuel cell technology, carbon dioxide
  capture and storage)
• Terrestrial ecosystems offer significant carbon
  sequestration potential globally - up to 100GtC
  over the next 50 yrs
• Half of the projected increase in global
  emissions between now and 2020 could be reduced
  at negative costs), while the other half at less
  than 100 tC (note 100 tC is 25 cents per
  gallon of gasoline) - realizing these reductions
  involves supporting policies/overcoming barriers,
  increased RD, effective technology transfer
• Domestic and international project-based and
  emissions-rights carbon trading significantly
  reduces costs
• Stabilization of carbon dioxide at 450ppm is
  significantly more costly (4-18 trillion) than
  higher stabilization levels (i.e., above 550ppm),
  but still does not significantly affect GDP
  growth rates over the next 100 years, e.g.,
  annual GDP growth rates decreased by about
  0.01-0.06 per year.

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Actions Needed to Reduce GHG Emissions

• Establish a long-term stabilization GHG
  concentration goal
• Negotiate an equitable, flexible allocation of
  GHG emissions recognizing differentiated
  responsibilities contraction and
  convergence?????
• Industrialized countries should immediately start
  to decarbonize their production of energy (e.g.,
  more efficient fossil fuels, renewables, carbon
  capture and nuclear (?)), increase the efficient
  use of energy (e.g., transportation, buildings.
  industry), and enhance both public and private
  energy R_at_D programs
• Developing countries should build on synergies
  between local and global environmental
  objectives, i.e., simultaneously reduce local and
  regional air pollutants and GHGs, and adopt
  energy efficient technologies utilizing the
  emerging carbon markets and the GEF
• All countries should eliminate perverse energy
  and transportation subsidies and internalize
  local and regional environmental externalities to
  facilitate the penetration of environmentally-frie
  ndly technologies
• Develop efficient national and international
  carbon markets
• Facilitate technology transfer through improved
  policy regimes

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Voluntary Agreements by the Private
Sector

• Some examples of types of commitment
• ABB 1 per year reduction in GHG
  emissions between 1998 and 2005 plant
  efficiency targets and end-product efficiency
  targets
• Alcao 25 reduction in emissions by 2010
• Dupont 65 reduction in GHG emissions by
  2010 hold energy use constant source 10
  of electricity from renewables by 2010
• IBM Improve energy efficiency and reduce
  GHG emissions by 4 annually reduce PCF
  emissions by 40 per unit of production by
  2002
• Ford Improve fuel efficiency of SBUVs by
  25 by 2005 reduce GHG emissions from
  European fleet by 25 by 2005
• Shell 10 reduction in GHG emissions by
  2002 relative to1990 energy targets per
  tonne of product
• Toyota 10 reduction in GHG emissions by
  2010
• Toyota (US) Reduce energy use per unit of
  production by 15

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Voluntary Agreements by the Private
Sector

• Underlying Reasons for Targets early movers
• Improving their competitive market position by
  reducing production costs and enhancing current
  sales
• Anticipation of regulatory and future market
  environments
• Contribute to the design of equitable national
  and international policies and programs
• Enhance corporate reputation via environmental
  leadership
• Risks
• Governments do not recognize early action
• Governments select a late baseline
• Governments do not regulate at all

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Challenges for the Cement Industry

• The cement industry contributes about 2 of
  global carbon dioxide emissions, which can be
  compared to
• The Africa region about 4
• The airline industry about 4
• Decrease emissions
• Purchase carbon emissions reductions through the
  emerging national and international carbon
  markets

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Conclusions

• Human activities are changing the Earths climate
  
• Human-induced climate change threatens poverty
  alleviation and sustainable economic growth
• Industrialized countries are the cause of
  human-induced climate change, but developing
  countries and poor people are the most vulnerable
• The actions of todays generation will profoundly
  effect the Earth inherited by our children and
  future generations
• There are cost-effective and equitable solutions,
  but political will and moral leadership is needed
  
• Innovative public-private partnerships and
  technology transfer are needed
• Market reform is needed reduction of energy
  subsidies and internalization of local/regional
  externalities (i.e., pollution costs)
• Increased public and private sector funding for
  energy R_at_D