Development pathways towards tight carbon constraints Jean Charles Hourcade Christophe Cassen Cired’s program with EPE/IDDRI, the Chair modeling prospective for sustainable development Paristech, in collaboration with the Coppe (Brazil) and the University of Ahmenabad (India)

What are the concrete objectives of the program ?  To scrutinize the world emissions pathways to stabilize atmospheric CO 2 concentration at 450 ppm by the end of the century  To understand how some specific sectors would react to this strong carbon constraint : energy, sheet glass, steel, cement, aluminum beyond competitiveness issues To understand how economies would react to this strong carbon constraint  To explore if different development options (regarding construction, infrastructure, energy, transportation, territory planning) would lead to the same result with a reduced constraint

What means of exploration ?  An innovative modelling platform : Demography Productivity International Trade Financial Flows Technology costs Fossil fuels inventories Technical progress Sectoral Energy, food,technology, land-use and urban model s Macroeconomic model IMACLIM-R Equipment stocks Car fleets Infrastructures Industrial sectors + an iterative dialogue between researchers and industrials (Renaud Crassous, Scenarios for transition towards a low-carbon world in 2050 : What’s at stake for heavy industries? With FONDDRI/EPE, 2008)

Example of a Business As Usual scenario ‘ Ingredients’ of the scenario: – Large economic catch-up in emerging and developing countries – Together with a rapid expansion of infrastructures and equipments – Median assumptions for energy and technical change REF Results – From 2010 to 2050 World GDP x3.2 (OECD x2, China x4, India x6.5) Total primary energy x2 Raw Material Demand x2 to x3 Road Transportation x Gtons of CO2 emissions (Renaud Crassous, Scenarios for transition towards a low-carbon world in 2050 : What’s at stake for heavy industries? With FONDDRI/EPE, 2008)

What Lessons of this rather conventional exercice? ST1 A steeply increasing carbon value (up to 220 €/tCO2 in 2030, 430 €/tCO2 in 2050) Not so much choice about the future technology portfolio A tricky transition for energy-intensive countries (no regret is not no pain…) A critical momentum to avoid carbon-intensive lock-ins Risks due to a weak control on some upstream drivers of emissions (localization patterns, infrastructures, urban forms) – One must secure the transition and the long-run (Renaud Crassous, Scenarios for transition towards a low-carbon world in 2050 : What’s at stake for heavy industries? With FONDDRI/EPE, 2008)

What Lessons of this rather conventional exercice? ST1 A steeply increasing carbon value (up to 220 €/tCO2 in 2030, 430 €/tCO2 in 2050) Not so much choice about the future technology portfolio A tricky transition for energy-intensive countries (no regret is not no pain…) A critical momentum to avoid carbon-intensive lock-ins Risks due to a weak control on some upstream drivers of emissions (localization patterns, infrastructures, urban forms) – One must secure the transition and the long-run (Renaud Crassous, Scenarios for transition towards a low-carbon world in 2050 : What’s at stake for heavy industries? With FONDDRI/EPE, 2008)

A carbon price only scenario: mind the transition …. and the end point (450ppm CO2 stabilisation scenarios) Source: Crassous, Sassi, 2008

In search of bifurcations towards alternative pathways The same carbon constraint : a CO 2 stabilization at 450 ppm by the end of the century New policy framework: internalize broader set of sustainability constraints including local pollution and poverty Play on early action on transportation and building infrastructures, in relation with changes in the localization of activities and consumption patterns including mobility, Play on a broader set of policy instruments in a ‘second best world’ (decentralized emission trading scheme, carbon taxes, land pricing, early upfront investments on infrastructures) ST2 (Scenarios for transition towards a low-carbon world in 2050 : What’s at stake for heavy industries? With FONDDRI/EPE, 2008)

Urban planning: a key challenge to lower the transition Two ‘polar cases’ may be possible for a climate friendly development: -a dispersed city paradigm, with very decentralized energy production units, mostly renewables, -a dense city paradigm, with a centralized and optimized energy production system ST2 (Renaud Crassous, Scenarios for transition towards a low-carbon world in 2050 : What’s at stake for heavy industries? With FONDDRI/EPE, 2008)

In search of bifurcations towards alternative pathways ST2 (Scenarios for transition towards a low-carbon world in 2050 : What’s at stake for heavy industries? With FONDDRI/EPE, 2008) General results A slightly reduced carbon constraint (- 12%) A significant reduction in the transition cost for some countries Better long-run control of emissions from transportation More renewables in the decentralized paradigm Less renewables in some centralized area

An example : towards a low carbon mobility ST REFSTAB 1STAB 2 En 2001En 2050 MOTORISATION DU PARC ConventionnelleAutre REFST 1ST Motors ConventionalOther (Elec, Hyb, H2) (Renaud Crassous, Scenarios for transition towards a low-carbon world in 2050 : What’s at stake for heavy industries? With FONDDRI/EPE, 2008)

Early Action on Infrastructures: reassuring end-points … and still transition problems (450ppm CO2 stabilisation scenarios) Source: Crassous, Sassi, 2008

Key messages (1/2) A climate impasse with the Business As Usual scenario. An increasing carbon value and a strong political engagement necessary to set in motion the necessary mutations. Different development options for transport infrastructures and urban planning : reduces the transition cost and produces higher economic growth opportunities in the long term. A leading role for the materials producers, in a context of increased demand together with a decarbonization of their production. A significant increase in energy efficiency necessary, as well as massive and rapid deployment of new technologies : very-low energy buildings and vehicles, CCS, nuclear and renewables. Without the CCS option, an increased role for nuclear and renewable energy (Renaud Crassous, Scenarios for transition towards a low-carbon world in 2050 : What’s at stake for heavy industries? With FONDDRI/EPE, 2008,)

Key messages (2/2) Policies are beneficial over the long run towards but uniform carbon prices (only) policies are squeezed: -They hurt emerging economies over the short run (when the carbon prices are low, relatively low!!!) - Without preventing risks of lock-in in carbon intensive development pathways Transtion towars a low carbon society needs strong climate policies with both a carbon price and change in development styles (urban planning, type of infrastructures…) In the absence of fully fledged carbon market, need to articulate financial support to infrastructure projects and Namas More information: