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Is it possible to achieve carbon-free prosperity?

June 4, 2019 por Marcela Jaramillo - Adrien Vogt-Schilb Leave a Comment


Last year the top climate scientist of the world presented a report that answers the call nations tasked them to study: what will be the impacts of global warming of 1.5°C above pre-industrial levels and what paths could the world take to limit global temperature rise to 1.5°C?

The answer to the first question is grim: What is at stake if we do not stabilize climate change is the prosperity of all and the development gains to lift people out of poverty.

The good news is that scientists also have a clear solution to offer to stabilize climate change at 1.5°C: We need to achieve net zero emissions by 2050. Even better, we know how to get there, using actions on five pillars:

  1. Decarbonizing energy generation
  2. Electromobility, to leverage clean electricity (and electrification of industrial process)
  3. Improving public transport systems
  4. Stopping deforestation and starting to reforest
  5. Reducing waste and increasing efficiency in the energy and food sectors, and switching to low-carbon materials and diets

The best part of it is that a world with zero net emissions is full of economic opportunities. Renewable electricity is progressively becoming the cheapest option for investors, and the region is home to record-cheap renewable energy contracts. Efficient public transport systems will improve the lives of ordinary citizens and reduce the cost of time wasted in traffic and local pollution.

How do we get there? What can governments do today? Using what the UN is calling long-term strategies, or national decarbonization plans may be the key for governments to help their countries make the transition to net zero. In the region, Mexico and Costa Rica already have such plans. Let me explain how they work.

A Plan starts by defining the picture of where the country wants to be in 2050. Say, a prosperous zero-carbon economy, with efficient waste management, integrated ecosystems, renewable electricity supply, and efficient mobility systems.

From there, the Plan can help governments figure out mid-term targets to put their country on tracks towards decarbonization. In Costa Rica, the plan sets the goal to reach 85% of electric buses by 2050. Given the time it takes to change fleets, it aims at getting to 30% of electric buses already by 2035.  This informs immediate actions that the government can take. In Costa Rica, the current administration aims at changing bus procurement regulations by 2021 to reward the entry of new electric buses.

Finally, a long-term vision helps governments anticipate the transition of jobs and communities, and remedy trade-offs. In Chile, the government announced  a voluntary agreement from power generators to phase out coal power plants before 2040. Setting a long-term goal gives time to negotiate the timing with different stakeholders and discuss possible compensation mechanisms for households and communities that currently rely on coal jobs.

How is the IDB helping?

  1. Go Local – Technical capacity building. We noticed that the academic discussion on decarbonization often depends on foreign models. So, we took the initiative to train local teams in using the kind of models that the Intergovernmental Panel on Climate Change (IPCC) scientists use. In Costa Rica, this project meant the government was able to get inputs from the University of Costa Rica to inform its plan.
  2. Plan beyond – Supporting the design of long-term strategies. Many countries are responding to the UN invitation to present long term strategies in 2020. We are providing technical support to inform decarbonization pathways across sectors; define long, medium- and short-term targets; and actively engage stakeholders to co-design the strategy. In Costa Rica, we supported the drafting process to define the main components that should be included in the Plan.
  3. Act now – Implementation plans. Long-term strategies will need to be implemented to deliver results to achieve the targets countries are setting. This is why we are helping countries like Chile and Costa Rica develop financial strategies and investment plans; these exercises enable governments to identify the mix of policies, regulation and investments required and define the tools to mobilize financing from public and private sector.

At the end of the day, we are a development bank and we mean business. Decarbonization plans are an excellent exercise to define investment priorities and facilitate dialogue with development banks. In Costa Rica, the IDB is supporting the introduction of electric buses, one of the priorities of the Plan. Decarbonization plans also identify policy actions needed to make progress, such as revising electricity tariffs or mandating the uptake of renewable electricity or the electrification of public transport vehicles, and development banks could use policy plans to support that.

The scientific community has laid out a clear call on the urgency to tackle climate change, and it has also pointed to the tools that can help nations to decarbonize on time. At the IDB we are strengthening planning capacity and financing countries plans to transition to a prosperous carbon-free economy.

Liked this post? Don’t miss the followings:

How much is it going to cost to decarbonize the transport sector in Costa Rica?

A Fifth of Power Plants Globally Could Need to be Stranded to Meet Climate Goals

Three steps to a zero carbon future


Filed Under: Climate change

Marcela Jaramillo

Marcela Jaramillo Gil is a specialist in climate policy and finance. Previously, she worked as a consultant at the IDB's Climate Change Division, focused on the consolidation of the IDB's support for the implementation of the Paris Agreement through NDC INVEST, the design of Long-Term Decarbonization Strategies and approaches to align public finances to climate goals. Marcela is co-chair of the LEDS-LAC Regional Platform, and previously was a senior advisor for finance and climate diplomacy at the British think tank E3G. In the past, Marcela worked in the energy sector leading research, design, and implementation of renewable energy systems. Marcela has a degree in Mechanical Engineering from the National University of Colombia and a Master's Degree in Sustainable Energy Technologies from the University of Southampton.

Adrien Vogt-Schilb

Adrien Vogt-Schilb is a senior climate change economist at the Inter-American Development Bank, in the Chile office. Adrien's work focuses on the design of effective and politically acceptable climate strategies. He develops tools to align climate policies with development goals in all sectors and to manage political economy issues in the transition to net-zero – including labor, social and fiscal impacts. Adrien is a trained engineer, holds a PhD in economics and is the author of 8 books or monographs, and more than 40 academic papers on climate change and development. He posts about his research on his LinkedIn account https://www.linkedin.com/in/adrien-vogt-schilb/

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This blog is a space to reflect about the challenges, opportunities and the progress made by Latin American and Caribbean countries on the path towards the region’s sustainable development.

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