The 21st Century climate challenge

3Avoiding dangerous climate change: strategies for mitigationTable 3.4 Industrial energy efficiency varies widelyEnergy consumption per unit produced(100=most efficient country) Steel Cement AmmoniaJapan 100 100 –Europe 110 120 100United States 120 145 105China 150 160 133India 150 135 120Best available technology 75 90 60Source: Watson et al. 2007.whereas the benefits of emission reductions,like the costs of rising emissions, are cumulative.Accelerated introduction of CCS technologiesin particular could produce very large cumulativegains in the post-2030 era.Our focus on China and India also understatesthe wider potential benefits. We apply ouralternative energy scenario to these countriesbecause of their weight in global emissions.However, the exercise has broader relevance.Consider the case of South Africa. Withan energy-sector dominated by low-efficiencycoal-fired power generation (which accountsfor over 90 percent of electricity generation)and an economy in which mining and mineralsproduction figure prominently, South Africa isthe only country in sub-Saharan Africa with acarbon footprint to rival that of some OECDcountries. The country has a deeper footprintthan countries such as France and Spain—andit accounts for two-thirds of all CO 2emissionsfrom sub-Saharan Africa. 129 Raising averageefficiency levels for coal-fired power generationin South Africa to 45 percent would reduceemissions by 130 Mt CO 2by 2030. That figureis small by comparison with China and India.But it still represents over one-half of all energyrelatedCO 2emissions from sub-Saharan Africa(excluding South Africa). 130 In South Africaitself enhanced efficiency in the coal sectorwould help address one of the country’s mostpressing environmental concerns: the seriousproblems caused by emissions of nitrous dioxideand sulphur dioxide from coal combustion. 131For the world as a whole, enhanced energyefficiency in developing countries offers someobvious advantages. If climate security is aglobal public good, then enhanced efficiencyis an investment in that good. There are alsopotentially large national benefits. For example,China is attempting to reduce emissions fromcoal plants to address pressing public healthconcerns (box 3.10). About 600 million peopleare exposed to sulphur dioxide levels aboveWHO guidelines and respiratory illness is thefourth most common cause of death in urbanareas. In India, inefficiencies in the powersector have been identified by the PlanningCommission as a constraint on employmentcreation and poverty reduction (box 3.11). 132As these examples demonstrate, both countriesstand to gain from enhanced energy efficiencyand reduced pollution—and the entire worldstands to gain from the CO 2mitigationthat would come with improved efficiency.Conversely, all parties stand to lose if the gapsin coal-fired energy efficiency are not closed.If the potential for win–win outcomes is sostrong why are the investments in unlockingthose outcomes failing to materialize? For twofundamental reasons. First, developing countriesthemselves face constraints in financing andcapacity. In the energy sector, setting a coursefor low-carbon transition requires large frontloadedinvestments in new technologies, some ofwhich are still in the early stages of commercialapplication. The combination of large capitalcost, higher risk and increased demands ontechnological capabilities represents an obstacleto early deployment. Achieving a breakthroughtowards a low-carbon transition will imposesubstantial incremental costs on developingcountries, many of which are struggling tofinance current energy reforms.Failures in international cooperationrepresent the second barrier. While theinternational climate security benefits of alow-carbon transition in the developing worldmay be substantial, the international financingand capacity-building mechanisms needed tounlock those benefits remain underdeveloped.In energy, as in other areas, the internationalcommunity has not succeeded in developing astrategy for investing in global public goods.This is not to understate the importance ofa range of programmes that are now underway.150 HUMAN DEVELOPMENT REPORT 2007/2008