1. Fredrik Hedenus Physical Resource Theory Fredrik Hedenus hedenus@fy.chalmers.se Physical Resource Theory Chalmers University of Technology. The role of economics in climate change Policy instruments and long-term economic development Fredrik Hedenus hedenus@fy.chalmers.se Physical Resource Theory Chalmers University of Technology hedenus@fy.chalmers.se

2. Fredrik Hedenus Physical Resource Theory Long term climate targets

3. Fredrik Hedenus Physical Resource Theory - 1.00 2.00 3.00 4.00 5.00 6.00 01,0002,0003,0004,0005,0006,000 Population (million) Emissions (ton carbon per capita) USA Canada, Australia, New Zealand Japan OECD Europe Russia Other EIT China Middle East India Other Asia Africa Latin America

4. Fredrik Hedenus Physical Resource Theory Strategies to reduce atmospheric carbon content Reduced energy use Reduced energy use Reduced carbon intensity in the energy supply. Reduced carbon intensity in the energy supply. Biospheric carbon stock management Biospheric carbon stock management

5. Fredrik Hedenus Physical Resource Theory Three legged carbon abatement policy Price signal Price signal Technology policy Technology policy Energy efficiency standards Energy efficiency standards Picking technologies from the shelf Picking technologies from the shelf Wind power Wind power Ethanol from biomass Ethanol from biomass Conventional nuclear power Conventional nuclear power Bringing technologies to the shelf Bringing technologies to the shelf Carbon capture and storage Carbon capture and storage Solar PV Solar PV Fuel cells Fuel cells

6. Fredrik Hedenus Physical Resource Theory Three legged climate policy Price signal Price signal Technology policy Technology policy Energy efficiency standards Energy efficiency standards

7. Fredrik Hedenus Physical Resource Theory Costs of meeting stabilization target

8. Fredrik Hedenus Physical Resource Theory Global GDP under climate policy Source Azar & Schneider, 2002. Ecological Economics

9. Fredrik Hedenus Physical Resource Theory Källa: Azar et al 2003