1. http://pesd.stanford.edu/ 1 Climate Change: Designing an Effective Response David G. Victor

2. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 2 Outline Five Myths Meet their Maker Toward an effective Climate Strategy Roles for America

3. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 3 Five Myths 1.Climate Change isn’t a problem

4. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 4 Five Myths 1.Climate Change isn’t a problem 2.Fossil Fuels will Run Out Shortly

5. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 5 Tapping the World’s “Infinite” Gas Resources White: where the lights are on, satellite imagery Blue  Red : Gas resources, with increasing size (USGS) Source:Baker Institute (Rice) and PESD (Stanford) Joint Study on the Geopolitics of Gas (CUP, forthcoming

6. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 6 Five Myths 1.Climate Change isn’t a problem 2.Fossil Fuels will Run Out Shortly 3.The “Engineer’s Myth” Technological Solutions, once identified, can spring forth and multiply

7. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 7 Rapid Evolution: DRAMs Source: Ausubel and N. Victor

8. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 8 Learning Curves

9. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 9 When does Learning Stop? The experience with gas turbines Source: Colpier and Cornland. 2002. “The Economics of the Combined Cycle Gas Turbine – An Experience Curve Analysis.” Energy Policy 30: 309-316.

10. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 10 Slow Evolution: Primary Energy Systems Source: Nakicenovic and Grubler; IIASA

11. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 11 Five Myths 1.Climate Change isn’t a problem 2.Fossil Fuels will Run Out Shortly 3.The “Engineer’s Myth” Technological Solutions, once identified, can spring forth and multiply 4.The “Planning Myth” Governments and firms optimize with full information and leverage

12. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 12 Five Myths 1.Climate Change isn’t a problem 2.Fossil Fuels will Run Out Shortly 3.The “Engineer’s Myth” Technological Solutions, once identified, can spring forth and multiply 4.The “Planning Myth” Governments and firms optimize with full information and leverage 5.The “Diplomats’ Myth” Policy Planning can be extended to the global level All countries should be involved in the most effective solutions

13. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 13 Antarctic Whaling: Perfect compliance

14. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 14 Trends in Fossil Carbon Emissions (Trajectories and Kyoto Commitments)

15. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 15 Trends in Fossil Carbon Emissions (Trajectories and Kyoto Commitments)

16. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 16 Toward and Effective Climate Strategy

17. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 17 Three Elements of An Effective Climate Strategy 1.Build Carbon Markets from the “Bottom Up”

18. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 18 A Madisonian Perspective: Emerging Carbon Currencies Sources: PointCarbon, International Emissions Trading Association Reprinted from Victor, House & Joy (2005)

19. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 19 Three Elements of An Effective Climate Strategy 1.Build Carbon Markets from the “Bottom Up” 2.Tailor and discriminate Numbers Interests

20. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 20 Allocation of World Emissions: Only a Few Countries Really Matter

21. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 21 Engaging Developing Countries: The Clean Development Mechanism (CDM) Source: PointCarbon

22. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 22 Limitations of the CDM Model Tropical “hot air”: currency devaluation –CH 4 : land fill and flaring –HFC23: industrial processes gases High transaction costs –Small Scale Projects –No methodologies for large-scale energy efficiency and fuel switching Baseline identification –Baselines feasible only for marginal activities

23. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 23 Example: CO 2 Savings from Natural Gas IEA forecast for China in 2020: –560GW (coal) –67GW (gas) What happens if you switch 80GW from coal to natural gas combined cycle? –Saves 105 Million Tonnes CO 2 per year beginning in 2020 Alternative Strategies: Climate-Friendly Development Programs

24. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 24 CO 2 Savings in Perspective

25. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 25 Three Elements of An Effective Climate Strategy 1.Build Carbon Markets from the “Bottom Up” 2.Tailor and discriminate Numbers Interests 3.Emphasize Technology as well as Emissions

26. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 26 Full Range of Published Scenarios

27. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 27 Percent of World Total 0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0% Arab States Africa SE Asia C & E Europe Oceania Latin America India & C. Asia CIS China Japan and NICs Western Europe North America Gross Expenditure on R&D (1994) Scientific Output (SCI Publications, 1995) Carbon Dioxide Emissions (1998) Top Innovators and Emitters by World Region

28. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 28 Elements of a Technology Strategy Diverse Country-Based Initiatives –Loose international coordination Basic and Applied technology –Common pitfall: premature selection of winners Price and technology progress are not either/or –Fiction: technology only strategies –Fiction: price only strategies Why price matters –Signal of credibility –Aligns markets to invest and adopt lower carbon technologies

29. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 29 America’s Role Support small forums as complements to Kyoto Lead the technology strategy Credible Policies at home

30. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 30 United States Germany Intensity: grams C per 1990 USD(mer)

31. Program on Energy and Sustainable Development - http://pesd.stanford.edu/ 31 U.S. Climate Change Policy: State-driven process Source: Pew Center on Global Climate Change