G R O W I N G I N T H E G R E E N H O U S E : P R O T E C T I N G T H E C L I M AT E B Y P U T T I N G D E V E L O P M E N T F I R S TVIII
G R O W I N G I N T H E G R E E N H O U S E : P R O T E C T I N G T H E C L I M AT E B Y P U T T I N G D E V E L O P M E N T F I R S TVIII
is to instill climate benefits and risks into the broader
set of international capital flows, only some of which are
climate-specific.
Along these lines, it is suggested that SD-PAM funding
should be able to come from any source: bilateral aid agencies, the Global Environment Facility, multilateral development banks, export credit agencies, the private
sector, the host government (federal and perhaps state/
local), state and local communities, or others. The
aspiration of the SD-PAMs approach is that by target-
ing actions of clear mutual benefit, larger financial flows will be freed up than would otherwise have been the case. This remains a complex issue however, and one that requires further exploration.
How might SD-PAMs be incorporated in an agreement?
The report presents a pledge-based approach to imple
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menting SD-PAMs. These pledges are voluntary, and may
take several forms, as outlined in Chapter 2:
1. First, a single country might pledge one or more SD-
PAM that is unique to its national circumstances and not
directly related to the pledges of other countries.
2. Two or more countries may make
mutual pledges,
perhaps consisting of simultaneous pledges by both a developing and developed country. This might involve a developed country pledging support for a developing country’s activities. This has the additional attraction of engaging donor countries on SD-PAMs in which they have a mutual interest, such as for the development of a particular technology or sector.
3. A group of countries could make harmonized pledges
in an SD-PAMs negotiation process. This approach ac
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knowledges the global nature of many industrial activities, and opens the door to multiple countries agreeing to the same kind of measures to promote or maintain an “even playing field” for competitive industries.
Accounting for SD-PAMs
Methods for defining SD-PAMs, establishing a registry,
reporting and reviewing are examined in Chapter 2.
Consideration is also given to whether and how emis
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sion reductions from SD-PAMs might be “credited.” The premise of SD-PAMs, however, is distinct from project mechanisms such as the Clean Development Mechanism (CDM) in that an SD-PAM will not need to demonstrate that it was undertaken for climate protection reasons. This is a major advantage of the approach, but also means that it is unlikely to practicable to allocate credits for emission reductions achieved in the manner of a CDM approach.
Being able to reasonably assess, in quantitative terms,
the contributions different countries make to the collective global effort to protect the climate would provide use
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ful input and information to negotiations that will likely stretch over multiple decades. However, it is important to note that an SD-PAM is a commitment to implement a policy or measure, not on a specific outcome expressed in terms of emissions. Additional work is needed at the sector and policy levels to develop reasonably simple and trans
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parent methodologies to quantitatively capture the GHG benefits of SD-PAMs.
Country studies
This report presents four country studies that examine
the types of policies and measures that might be framed as
SD-PAMs (Chapters 3-6). The authors of these studies are
in-country experts, but the aim of presenting them here is
both to investigate the potential SD-PAMs themselves and
to draw some more general conclusions about the SD-
PAMs model. The order in which they are presented is in
some sense a descending scale of how compelling the cases
are for an SD-PAMs approach. Seen another way, they are
an indication of how much outside assistance would likely
be needed to make them work. By a happy coincidence,
the order is also alphabetical.
Biofuels for transport in Brazil
Brazil’s biofuels program, discussed in Chapter 3, is the
only policy set described here which is already implemented
on a large scale and over a long time period. Brazil has used
a range of measures to support the use of ethanol from sug
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arcane as a transport fuel since the 1970s, when this model emerged as a means of responding to the oil crisis. Although the system was initially based on large subsidies, these have declined towards zero, and ethanol is now competitive with gasoline. The authors find that the effects have been huge: although the extent of ethanol use has varied over time, it now accounts for approximately one third of Brazil’s transport fuel. The savings in oil imports and associated debt servicing have saved the country around $100 billion in hard currency. Brazil’s external debt would be 50 percent higher today were it not for ethanol. Over a million jobs in rural Brazil depend on ethanol and sugar production, and the industry has been protected from exclusive dependence on the volatile world price for sugar. Air quality has gener
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ally improved, and biofuel manufacture produces around 1,350 gigawatt hours per year of electricity for export to the grid, a figure that is rising fast as technology improves. These benefits are reason enough for Brazil to continue and expand ethanol use, but the incidental impact on GHG emissions has been significant: an estimated saving of 574 million tons of CO
2 since 1975, or roughly ten percent of
Brazil’s CO
2 emissions over that period.