By Vasiliki Mitrakos
As international business executives and other leaders gathered for the World Economic Forum in Davos, Switzerland, January 21-24, top energy and climate experts among them came together for a special discussion on “The Future of Energy and Climate Change in Emerging Economies.” The event, occurring on January 23rd in Davos, was hosted by the University of Chicago and led by EPIC’s Michael Greenstone.
Greenstone framed the discussion by laying out the main energy challenge emerging economies, like China and India, face today: How to improve access to energy in order to grow the economy, while also cutting deadly pollution and confronting climate change.
“The countries with the lowest current consumption of energy are the ones that will grow to become the biggest energy consumers,” Greenstone said. “So the focus is mainly outside of the U.S. in determining the future of environmental quality.”
How can these countries maintain strong environmental quality, while also growing their economy? Executive Vice President and CEO of the International Finance Corporation at the World Bank, Jin-Yong Cai, emphasized that this is a major challenge.
“Access to electricity is the key to modern life,” Cai said. “And the world still has 1.2 billion people without access to electricity.”
One way to generate electricity in a safer way would be to mitigate the use of biomass, like wood, for cooking. Such wood-burning cookstoves generate significant levels of air pollution and are a major source of greenhouse gases. Cai says, in this respect, coal is a better option.
Though it is certainly far from a clean energy source, coal might be the only immediate, realistic, solution for developing countries, noted Jairam Ramesh, member of the Indian Parliament and Chair of the Future Earth Engagement Committee.
“In the short to medium term, defined as the next 10 to 15 years, I see no alternative to coal,” Ramesh said, noting that countries are bound to give priority to growing their economy over protecting their environment.
Carol Browner, a distinguished senior fellow at the Center for American Progress and former director of the White House Office of Energy and Climate Change Policy, offered one solution: to make this coal cleaner.
“For this infrastructure that gets built, whether it be coal infrastructure or natural gas infrastructure, we have to assume it is with us for a very long time,” she said. “So, if coal will be a reality for a long time, our focus should be on what we can do to reduce emissions. I think carbon capture is a way to do that.”
Ramesh agreed that improving the efficiency of coal plants would be a way to reduce emissions, and India could spearhead the use of this cleaner coal.
“Cleaner coal is certainly possible, and we are not doing enough on the cleaner coal front,” he said. “I’m quite optimistic that given a greater technological effort, cleaner coal will not be the type of disaster that the original coal utilization in the U.S. and China was.”
Browner also noted that economic and environmental objectives are not necessarily in competition with one another. The U.S. has a history of cleaning up the environment, while also growing the economy. This is partly because environmental policies create a push for innovation in the private sphere. When government incorporates a cost-benefit analysis into public policies, the costs to industries tend to be lower than the ultimate benefits to the public – which Browner attributes in part to the competition introduced in the market.
Looking ahead to the Paris international climate convention coming up in December, Ramesh stressed that there would likely not be one global agreement.
“What we will get in Paris is a bottom-up approach, it’s completely different from the Kyoto Protocol which is a top-down approach, but this is the approach that countries like the U.S., China and India are comfortable with,” he said.
This bottom-up approach means that each country will design their own plans to reduce emissions. The ideal approach would be a carbon tax.
“And, I think now is the time for carbon tax, with oil prices being the way they are,” Ramesh said. “States (or nations) can take the first step toward including a carbon tax within their economies, and then hopefully we can take that internationally.”