The Davos Climate/Energy brief

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A presentation held by Mr Allan Larsson at the seminar on the Swedish Embassy in Berlin on the 17th of January.

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<ul><li> 1. Potsdam Institute and Global Utmaning ,Swedish Embassy in Berlin, January 17, 2011 A post-Cancn agendato break the political deadlockon climate investment - The Davos Climate/Energy Brief</li></ul> <p> 2. The Davos Climate/Energy Brief </p> <ul><li>The Themeof the World Economic Forum in Davos, 26-30 January 2011: </li></ul> <ul><li> Shared norms for the New Reality </li></ul> <ul><li>Our Brief focuses on the New Reality in Climate negotiations </li></ul> <p> 3. The NewReality:1. T he political deadlock in the UN-process</p> <ul><li>Copenhagen, Cancn, Durban </li></ul> <ul><li>no global treaty in sight in spite of twenty years of climate negotiations </li></ul> <p> 4. The New Reality:2. The Investors Dilemma </p> <ul><li>Copenhagen and Cancun left the business community confused aboutthe widereconomic implications </li></ul> <ul><li>-a stable global carbon price is neccessary to form the cornerstone of any successful policy in the longer term (IEA) </li></ul> <ul><li>- still, no global CO2-price in sight </li></ul> <p> 5. The New Reality:3. The Green Race 3. - The EU presently the leader in clean tech export - Asian countries determined to win the race 6. The New Reality: Emerging consensus on energy *) Climate:an energy revolution is needed to tackle climate changeEnergy Security:reduced global pressure on oil is needed The Economy:a low carbon future is a powerful tool foreconomic modernization *) International Energy Agency, World Bank, EU Commission, Major Economies Forum, World Business Council for Sustainable Development, European Climate Foundation 7. Investing in a low carbon future- the hard choice: </p> <ul><li>Two main avenues</li></ul> <ul><li>to level the playing field for climate investments </li></ul> <ul><li>- more subsidies? </li></ul> <ul><li>or a CO2 price? </li></ul> <p> 8. Our contribution to a post-Cancun Agenda: Three elements </p> <ul><li>Focus on investment and technology, sharing opportunities! </li></ul> <ul><li>Agree on the principle of a technology neutral carbon price!</li></ul> <ul><li>Introduce a bottom up approach, building an International Climate Investment Community, as a complement to the UNFCCC-efforts to get 192 countries to agree on a global deal! </li></ul> <p> 9. A technology neutral CO2 price </p> <ul><li>The aim: levelling the playing field between fossil technologies and low carbon technologiesThe level: - the present CO2 price 15 a ton is subsidised by 25 /ton, at least 40 Euro/ton is needed by 2020 The effect: Pricing carbon .. is the optimal way of both generating carbon-finance resources and directing those resources to efficient opportunities (The World Bank) </li></ul> <p> 10. A technology neutral carbon price- how </p> <ul><li>A price trajectory to 2020 </li></ul> <ul><li>A mix of national policies </li></ul> <ul><li>Using cap-and-trade and CO2- taxation </li></ul> <ul><li> less on what we earn, more on what we burn </li></ul> <p> 11. Three reasons fora technology neutral CO2 price </p> <ul><li>- business and consumers, not governments, will choose technologies - will create predictability for sustainable energy investment - will bring revenuesfor the greening of the tax systems </li></ul> <p> 12. An InternationalClimate Investment Community </p> <ul><li>a European initiative </li></ul> <ul><li>inviting like minded countriesto agree on the basic principles</li></ul> <ul><li>growing step by step to an International Community(as the WTOand as the EU did) </li></ul> <p> 13. </p> <ul><li>a complementary approach</li></ul> <ul><li>to the UNFCCC-process, not an alternative one </li></ul> <ul><li>-more flexible, more ambitious </li></ul> <ul><li>- some key issues addressed, not all- similar initiatives exist, could be integrated </li></ul> <p>A concept not a blueprint 14. The Davos Brief:</p> <ul><li>to be discussed in Berlin, Washington and New York this week as an input to the Davos meeting</li></ul> <ul><li>- Input to discussions after Cancun among European and likeminded countries</li></ul> <ul><li>Next step: An Indepdendent Commission on Climate Investments? </li></ul> <p> 15. 16. Subsidising or pricingtolevel the playing field? - att all ndvndig teknik blir lnsam 17. A price trajectoryto guide investors 18. Development of the Swedish CO 2taxgeneral level and industry level from 2008 industry outside EU Emissions Trading Scheme (EU ETS) General level for 2010 level in figure</p>