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Beyondatwo-speedcarbonworld:

doweeec4velydeliveratthe
globallevel?
Makingithappenin2050.Howtosurpassastalemateinaglobalclimatepolicy
DEMOS,October3
rd
2012

ProfessorDieterHelm
AuthorofTheCarbonCrunch:Howwearege1ngclimatechangewrongandhow
toxit.YaleUniversityPress,2012
TheQues4ons
WhyhassoliRlebeenachieved?
Recognisingcurrentfailures
Whatarethecausesofglobalwarming?
Facinguptothefacts
Howdowemakeprogress?
Deliveringeec4veclimatemi4ga4on
ProfessorDieterHelm 3rdOctober2012 2
330
340
350
360
370
380
390
400
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Emissionskeepgoingup:
AtmosphericCO2(ppm)
Source: US Department of Commerce National Oceanic & Atmospheric Administration (NOAA)
ProfessorDieterHelm 3rdOctober2012 3
WhyhassoliRlebeenachieved?
Kyotoisproduc4on-based
KyotodoesnotbindChina,India,South
AfricaorevenUS.
Europehasbeende-industrialising
Currentrenewablesareexpensiveand
contributeliRle
IEuropesgloballeadership+20202020package
hasnotmadeanysignicantdierence
ProfessorDieterHelm 3rdOctober2012 4
Europe:anunviableposi4on
Compe44veness
Consump4on
ofcarbon
Currentrenewablespolicies
Costs
Currentrenewablescannotmakemuchdierencetoglobalclimatechange
land&shallowseaareasjustnotbigenough
Energyeciencygoodideabutdoesnotreduceenergydemand
ProfessorDieterHelm 3rdOctober2012 5
Whatislikelytohappenbefore2020?
By2020:
ChinaX2GDP
IndiaX2GDP
400600GWsnewcoal(if12
th
5yearplan
implementedinChina)
ProfessorDieterHelm 3rdOctober2012 6
Whatcausesglobalwarming?
Theroleofcoal,Chinaandpopula4ongrowth
Carbonconsump4on,notproduc4on
ProfessorDieterHelm 3rdOctober2012 7
HistoricalcoalburnvsatmosphericCO
2

(mt&ppm)
330
340
350
360
370
380
390
400
0
1000
2000
3000
4000
5000
6000
A
t
m
o
s
p
h
e
r
i
c

C
O
2

(
p
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)

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6
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e
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)

Coalconsump4on AtmosphericCO2
Source:USDepartmentofCommerceNa4onalOceanic
&AtmosphericAdministra4on(NOAA),BPsta4s4cal
reviewofworldenergy2011
ProfessorDieterHelm 3rdOctober2012 8
Worldcoaldemandscenariosto2035(mt)
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
1980 2009 2020 2035
M
i
l
l
i
o
n

t
o
n
n
e
s

Newpolicies
Currentpolicies
450scenario
Source:OECD/IEAWorldEnergyOutlook2011
ProfessorDieterHelm 3rdOctober2012 9
Bordercarbonadjustments
Focusoncarbonconsump4on
Nottopricecarbonistosubsidiseexports
Loca4onalindierence
Startwithsmallnumberofverylargecarbon-
intensiveindustries
Encouragesotherstointroducecarbonprices
IBoRomup,step-wisetowardsglobalcarbon
pricing
3rdOctober2012 ProfessorDieterHelm 10
Popula4ongrowththeprojec4ons
Source:UnitedNa4ons
ProfessorDieterHelm 3rdOctober2012 11
Howdowemakeprogress?
Carbonpricing
Carbonconsump4onandborder
adjustments
Coalgassubs4tu4on

Andthen.
Enormousscopefornewtechnologies
ProfessorDieterHelm 3rdOctober2012 12
Carbontaxesv.EUETS
0
5
10
15
20
25
30
35
C
a
r
b
o
n

p
r
i
c
e

E
U
R

Source: Bloomberg
Acarbontax
alterna4ve
EUETSfuturesprices
ProfessorDieterHelm 3rdOctober2012 13
CoalGasforthetransi4on

Fossilfuelemissions
0
200
400
600
800
1000
Coal (average) Fuel oil Natural gas
Approximate CO2 emissions: grammes of CO2 per KwH of electricity generated
Source: International Energy Agency "CO2 emissions from fuel combustion highlights 2011"
ProfessorDieterHelm 3rdOctober2012 14
ThelongtermpathtoUSenergy
independence
1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
M
i
l
l
i
o
n

t
o
n
n
e
s

o
i
l

e
q
u
i
v
a
l
e
n
t

Consumption
Production
Source:BPenergyoutlook2030,Jan2012
ProfessorDieterHelm 3rdOctober2012 15
Thenewtechnologiesfuture
renewables
Wind
Nextgenera4onsolar
Geothermal
SmartMeters
StorageandbaReries
Electrica4onoftransport
Biotechnologies
Nuclear:PRISM,Fast-breeders
ProfessorDieterHelm 3rdOctober2012 16
Conclusions
Europeanleadershiphasfailed
20202020hasprobablymademaRers
worse
Durbanledto450ppm++
EITHER:
Changetacknow
Admitdefeat
ProfessorDieterHelm 3rdOctober2012 17
r
8/21/12 The Carbon Crunch by Dieter Helm - Yale University Press
1/3 yalebooks.co.uk/display.asp?K=9780300186598#
ree UK DeIIvery
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imensions: oq puges: zq x 16mm
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www.dieterhelm.co.uk
EuropeanEnergyPolicy,in:TheOxfordHandbookoftheEuropeanUnion
EditedbyEJones,AMenon,andSWeatherill,OUP,August2012.
TheUKsnewdashforgas,Prospect,20
th
September2012.
Trade,climatechangeandthepoliDcalgametheoryofbordercarbon
adjustments,withCameronHepburnandGiovanniRuta,May2012,
GranthamResearchIns4tuteonClimateChangeandtheEnvironment,
WorkingPaperNo.80.
Surprisetheoilpriceisnthigher,Prospect,April2012.
Thesustainablebordersofthestate,OxfordReviewofEconomicPolicy,
Volume27no4,winter2012.
WhatnextforEUenergypolicy?,inGreen,safe,cheap:WherenextforEU
energypolicy?editedbyKa4nkaBarysch,CentreforEuropeanReform,2011.
TheEconomicsandPoliDcsofClimateChange,Helm,D.R.andHepburn,C.
(eds),(newedi4on2011),OxfordUniversityPress.
ProfessorDieterHelm 3rdOctober2012 19