To Stabilize Emissions (Goldman Sachs & WRI)
GLOBE-Net, 2 May 2007 – The World Resources Institute and the Goldman Sachs Center for Environmental Markets have produced an analysis of ways to promote the policy and market structures for deploying low-carbon technologies to mitigate climate change.
The authors identify a major obstacle to addressing the climate challenge: the daunting scale of potential solutions. In essence, reducing emissions to safe levels means transforming the way we produce and use energy, whether in power, transport, or heating and cooling, as well as many important industrial processes.
Climate change is not just an environmental issue – it is fast becoming one of the defining facts of economic development in the 21st century, argues the report. It will shape investment, technology deployment and human development around the world, and no sector will be more profoundly affected than energy. Thriving in the huge and fast-changing energy market will mean understanding the risks and opportunities presented by the public policy choices made in reducing emissions and the infrastructure that is required to implement these choices.
However, they point out that a number of options exist for reducing emissions by managing energy demand and employing low-carbon energy supplies that can make major contributions to clean economic growth.
Yet they assert that three areas need to coalesce into a coherent vision in order to achieve adequate levels of emissions reductions:
“¢ The technologies involved, including the physical and capacity-related constraints to deploying them.
“¢ The investment required: who will provide it, the mechanisms they will use, and its cost.
“¢ The policies that will offer the most effective incentives to providers of both technology and capital to implement lower-emission solutions.
The report uses the famous framework produced by Stephen Pacala and Robert Socolow of Princeton University, in which the required emission reductions are broken down into manageable (though still large) “wedges”, each provided by a different technology or set of technologies. Owing to its solution-oriented framework, the wedges approach has been popular among policy makers and technology developers.
The paper presents an overview, using the wedges framework, on how technology, investment and policy interact. It is intended to engage actors in the policy and investment communities as the key enablers of clean technology deployment worldwide.