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The Low-Carbon Development Paradigm and Climate Change Risk Reduction Strategy for the Economy

  • ECONOMIC POLICY
  • Published:
Studies on Russian Economic Development Aims and scope

Abstract—

The low-carbon economic paradigm is critically analyzed as to stabilizing the climate situation (not to exceed the 2°С growth of the global air temperature until the end of the 21st century) and improving the quality of life and sustainable economic growth. Climate change is emphasized as being just a part of the total risk for human life and health and economic growth, which is proved by the set of goals of sustainable development adopted by the world community. Hence, a solution of the problem of climate change is necessary—in the long and and distant future—but insufficient condition to minimize the risk for the quality of human life, primarily health, and sustainable economic growth. It is agrued that an efficient action strategy to reduce climate risks for socioeconomic development must target not finding the ways to reduce greenhouse gas emissions but rather development and implementation of a set of measures to ensure the basic goals of sustainable development. In addition, priority must be given to the reduction of emissions of hazardous substances, as well as to planning and implementing measures of the communitiesэ and economy adaptation to climate change with adaptation remaining a key component of the climate risk reduction policy. A case study of China—the global leader in low-carbon energy development race—proves that the strategic policy priority is not climatic but environmental and economic issues as well as (in case of nuclear power plants) military-strategic motivation.

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Notes

  1. To reduce emissions by 2025 at least by 26% compared to 2005. See [2].

  2. M. Turnbull, prime minister of this country, had to leave office in August 2018 under the pressure of the conservative wing of his Liberal Party after he had proposed to set goals for reducing greenhouse gas emissions [3, p. 1].

  3. The rates of reducing the carbon intensity of global production (СО2 emissions/global GDP) in recent years have been 2.6% a year against the required 3% for the nonexceedance of the 2°C growth in the global temperature in 2100 compared to the preindustrial epoch. As a result, the gap between these two values increases and causes the necessity to increase the average annual rates of production decarbonization to 6.4% until the end of the current century. See [3, p. 1].

  4. Thus, in Germany, measures to subsidize solar and wind energy, implemented within the well-known “energy shift (turn),” cost the economy €60 bln ($66 bln) in 2015 alone, whereas the level of СО2 emissions did not decrease in 2010–2015. See [5].

  5. It is appropriate to recall here D. Trump’s “climate change is a hoax”!

  6. The above IPCC report [6] mentions the term low-carbon twice regarding energy technologies.

  7. In the context of this article, the above criterion is assumed to be an enacted normative indicator without discussing its scientific validity as the main climate “stabilization” metric, although the 2°С threshold has long been questioned and criticized by authoritative foreign and domestic scientists. At the same time, a fresh (August 2018) publication by well-known specialists in an authoritative edition, The Proceedings of the National Academy of Sciences (PNAS), came under notice because it was perhaps one of the first attempts to argue scientifically the 2°С growth in the global temperature by the end of the current century compared to the preindustrial epoch as a bifurcation point or threshold that, if crossed, would heighten the probability of a sharp increase in the amplitude and scale of climate change and its consequences. See [8].

  8. This is also confirmed by expert estimates of the authoritative consultancy PwC. See [3].

  9. Strictly speaking, technologies, as well as СО2 extraction from the atmosphere in general, do not belong to low-carbon economics, whose goal, as was noted above, is to minimize the current and future anthropogenic СО2 emissions and not to maximize the absorption of carbon dioxide already accumulated in the atmosphere over centuries, not only anthropogenic (emissions) but also naturally occurring. Nevertheless, not unusual is the (extremely) extensive interpretation of low-carbon economics, which ultimately dilutes the essence of this concept. An example can be, in particular, the use of the term negative emissions (to make at least a reference to emissions, although they are nonexistent in reality) considering СО2 extraction from the atmosphere, of mixed natural–anthropogenic genesis.

  10. Under different scenarios, the amount of absorption of greenhouse gases accumulated in the atmosphere and necessary for nonexceedance of the 1.5°С threshold until the end of the current century is estimated by the IPCC experts to be from 100 to 1000 Gt of СО2 equivalent [6, §5.3].

  11. Three out of four groups of technologies (bioenergy with carbon capture and storage (BECCS); direct СО2 absorption from the atmosphere; and the carbonization of minerals, particularly olivine) require costs of $60 to $600 per ton, net of RD costs. In addition, the market (demand) for these technologies is absent nowadays (See [13]). Only forestation is a time-tested and economically feasible solution. However, it also has limitations (e.g., a change in the absorbing capacity of forests as trees grow older) and, in our opinion, at best ensures only half of the required amount of СО2 absorption.

  12. This very share of the population in the world (and in cities in Europe) lives in territories where the air pollution level exceeds the WHO criteria for the “healthy air,” including nearly 60% of the global population living in territories with the air quality not meeting the safety criteria for human health. See [14, p. 3].

  13. The above estimations of human health damages from air pollution are conservative, considering the fact that doctors have only identified several significant negative effects, and it is too early to give their economic assessment. The most striking instance is the negative effect of air pollution on cognitive performance. According to the latest findings of Chinese scientists, the SO2 and NO2 pollution growth, generated by transport, cause oxidative stress, neuroinflammatory and neurodegenerative processes in the brain, negatively affecting speaking and counting abilities of humans and equivalent to the loss of one study year on average. For seniors over 64 years of age, this loss is estimated as several years. See [16].

  14. Note that, according to other data, premature mortality in the world is estimated at 6.1 mln people from air pollution indoors and outdoors (Institute for Health Metrics and Evaluation (IHME) Global Burden of Disease (GBD) Project, appraisal for 2016); from 9 mln people from all types of pollution, which is 16% of the global mortality (the same source, appraisal for 2015), to 12.5 mln people (WHO, appraisal for 2012). See [14].

  15. If indoor air pollution mortality is included into the estimates, the above figures for the world and China will increase, respectively, to nearly 9 mln people (i.e., 11% of the total global mortality) and 1.5 mln in China (17% of the country’s total mortality). See [14].

  16. The author’s estimates and calculations are based on [17, p. 12, 31; 18, p. 21; 19; 20]. Note that this estimation noticeably exceeds the existing estimations across Russia (80 000 people), which are made considering the effects of larger PM10 suspended particulates and which do not account for the emission effects of (a) PM2,5 suspended particulates and (b) household coal combustion on human health. The Russian President paid special attention to the latter circumstance, speaking at a meeting on the environmental situation in Krasnoyarsk krai on February 7, 2018. See [21].

  17. The corporate level shows a similar picture. For example, in Britain, the leader among developed countries in climate polity, only 10% of banks consider climate change a strategic risk and take it into account as such in the long term [23].

  18. Fossil fuel, primarily coal, resources depreciate owing to a sharp drop in their demand because of a hardened climate policy and the effect of technological innovations in the energy industry. See [24, 25].

  19. An even brighter example is probably coal, the global demand for which and the production of which, decreasing in recent years, increased in 2017: coal consumption increased by 1%, primarily because of China. Although the level of the demand for coal there remains below the peak reached in 2013, it remains as high as in Turkey, Indonesia, and India owing to the construction of new coal-driven heat-and-power plants, which form the basis of their energy industries, which ensure the high rates of industrial and economic growth in general. See [3, p. 1].

  20. The new climate economy concept was developed and publicized in 2013 by a group of authors and members of the Global Commission on the Economy and Climate, headed by N. Stern, former World Bank’s chief economist and leader of the well-known basic study on climate change economics (See [28]).

  21. For example, as for sustainable development goals 1 (no poverty) and 3 (good health and well-being), the authors of the authoritative medical journal Lancet Global Health proposed the integrated metric of “poverty-free life expectancy,” harmonizing the objective of increasing life expectancy with the objective of reducing poverty risk during these additional years of life. See [31].

  22. Nevertheless, what stands out is the fact that the intensity of discussion and, above all, the implementation of the policy of adaptation to climate change and its consequences by the global community (except for small island nations) is still way below the policy of reduction of anthropogenic greenhouse gas reduction. In Russia, the above breaking effect is also on full display.

  23. In addition, the reasons for such “forgetfulness,” unlike those for the slowdown in transition to low-carbon economics, rarely become the topic of discussion among climate activists and Greens.

  24. An example is the project of the Erkovets heat-and-power plant of 4 GW in the Amur River basin, its electric energy is to be exported to China. See [37].

  25. From 2011 to 2017, Chinese companies invested $6.8 bln into EU wind energy generation, including the purchase of wind energy generating projects in nine European countries. Over $5 bln were invested in Australia. China strives to acquire knowledge in offshore wind energy generation; gain new markets for its industry, which produces wind energy generators; and use all advantages of the RES local policy, such as tax benefits and “green” tariffs. See [38].

  26. It appears that the same motivation underlies Mexico’s economic policy. On the one hand, alongside Chine, it is a leader in economic decarbonization rates (the reduction of anthropogenic emissions in the atmosphere per GDP growth unit), 5% in 2016–2017. Over 20 mln inhabitants of Mexico City are exposed to problems of health and quality of life, which, just like in Beijing, are associated with air pollution; although, unlike the Chinese capital, these problems are noticeably less sharp, and the main source is not coal-driven heat-and-power plants but motor transport. On the other hand, favorable conditions for the development of solar energy generation and one of the lowest costs of electricity production on solar cells justify the efficiency of this energy source for Mexico.

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ACKNOWLEDGMENTS

This article was supported by the Russian Foundation for Basic Research (project no. 18-00-00596. “Global Climate Change Scenarios and Assessments of the Consequences of Their Implementation for the Socioeconomic Development of Russia in the 21st Century” within umbrella project no. 18-00-00600 “The Study of Socioeconomic Development Risks and Control Strategies for Russia in the Context of Global Climate Change”).

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  1. Institute of Economic Forecasting, Russian Academy of Sciences, Moscow, Russia

    B. N. Porfiriev

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Porfiriev, B.N. The Low-Carbon Development Paradigm and Climate Change Risk Reduction Strategy for the Economy. Stud. Russ. Econ. Dev. 30, 111–118 (2019). https://doi.org/10.1134/S1075700719020163

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