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☁️ "The Economics of Carbon"

Cutting Carbon

Photo by Bahador / Unsplash

Table of Contents

Hosts: Jeff Goldmeer & Brian Gutknect
Guest: Tom Kerr | Lead Climate Scientist, South Asia Region | World Bank
Category: ☁️ Carbon Reduction

Podcast’s Essential Bites:

[1:44] “The World Bank Group's mission is at a very broad level to end poverty and to advance prosperity. […] And so what that means is we spend a lot of time working with governments and also with the private sector, we provide loans to projects and different initiatives. But we also provide […] policy advice and what we call advisory services, where we're actually coming in and helping them design some of the solutions that they need. And so the main thing […] around climate change is that it's really impacting that developmental goal. We can't really achieve fighting poverty, if more and more people are being pushed into poverty because of things like extreme weather events. So climate change and development to really squarely kind of evenly set priorities for the World Bank Group.”

[2:56] “Power is […] the lifeblood to the economy. And the interesting thing that we see, as we especially get into Africa, and some of the lesser developed countries is that they don't have the heavy infrastructure that we have. So they're starting from scratch. And the other point is, with climate change accelerating so quickly […] the developing countries are on the frontlines of these extreme weather events, even in a much more intense way that we're seeing in our own country […].”

[3:33] “I work […] in South Asia and it's one of the world's most vulnerable regions. Over half of the people were affected by climate disaster in the last two decades. It's about 750 million people we're talking about. And these shocks keep coming. So we're talking about this summer, the city of Jacobabad in Pakistan was the hottest city on the planet with temperatures getting to 126 degrees Fahrenheit, which is hotter than the human body can handle. And then we had in 2020, super cyclone amphan in the Ganges Delta, pushing 3 million people to evacuate. So they're on the frontlines of this. And […] because of these sorts of intensive climate storms and events, they don't have the luxury to […] slow[ly] build the […] especially carbon intensive infrastructure that we do and then clean it up later. They've got to think about how do we build a power grid that's clean, efficient and low carbon right from the start?”

[5:09] “We actually did a study called “Decarbonizing Development” a few years back […]. And it really boiled down to the […] four fronts that countries need to act on. First, […] you need to decarbonize your electrical sector and get that as advanced as possible. Second, you need to massively electrify the rest of your economy using that clean electricity. This is for things like heavy industry, for buildings. […] Third is just greater efficiency and less waste and all sectors across the economy. And so this is driving energy efficiency in the home and buildings, and transport, as well as an industrial sector. [It’s about] circular economy […]. And then finally, and importantly, […] it's improving what we call carbon sinks. It’s […] reducing deforestation, helping soils and agriculture to absorb carbon from the atmosphere. That can help the agricultural sector to be more productive and at the same time, it helps us to win the battle as we're in as we see rising CO2 emissions […]. So those are the sort of four pillars and then […] each one of those obviously, will have several different policies underneath it.”

[11:14] “To me, it's just really clear, when you get the prices right, then businesses and consumers will see the cost of greenhouse gas emissions, and they'll make changes in their behavior as they'll invest in more efficient and cleaner options. Now, this is […] for the largest emitters. I'm talking roughly like the G 20. The biggest economies that have very large power sectors and industrial sectors that are easy to get your hands around. It doesn't work so well, when you're working in the agricultural sector, or something with very small, dispersed emissions. But if you had that sort of large emissions base, then putting a price on carbon and I would also argue removing fossil fuel and agricultural subsidies that aren't helping, should be a cornerstone. It should really just be part of any climate plan.”

[12:33] “Most people don't realize there's actually 65 different carbon pricing schemes around the world that are either in place or scheduled to be implemented globally. I think it's 45 national jurisdictions and then I think 34 sub-national, which is like a state or a province. And these represent about 21% of global greenhouse gas emissions, they're having a price put against them. They're continuing to expand.”

[13:32] “I think the more challenging part is that the average price that we're seeing around the world is around $5 a tonne of CO2. We had a high level commission a few years back that came up with a number that has to be closer to $40 a tonne. So we're not really there yet. And we need to figure out how do you steadily raise that price over time. And I think one tool that we've seen that's been successful is France and Canada [is] a price floor for their carbon markets. And that […] has helped to give some certainty and drive some of the investments.”

[21:46] “Climate negotiation never included in formal texts the world's fossil fuels. For the first time, the countries agreed to phase down coal based power as part of the agreement coming out of Glasgow. So I think that was really notable.”

[27:23] “I really am a big fan of [carbon] pricing. I think we should be getting the prices right and then the money will follow. And I think the other message is coming from Field of Dreams. “If you build it, they will come.” I think if you build the right policy environment, the private sector is ready to take advantage of these opportunities. […] And so I think it's just a matter of having this more strategic approach and thinking comprehensively. What role can the government play with the pricing and various incentives? And then step back and hopefully then we'll see a lot more private sector come in and see a lot more investment and accelerate this path towards decarbonisation, which we all want to see happen.”

Rating: ⚡⚡⚡⚡

🎙️ Full Episode: Apple | Spotify
🕰️ 30 min | 🗓️ 12/02/2021
✅ Time saved: 28 min