Seven Low Carbon Growth Country Studieswere conducted between 2007 and 2010 with support from ESMAP and the World Bank. These studies covered seven of the world’s major emerging economies: Brazil, China, India, Indonesia, Mexico, Poland, and South Africa. The significance of these countries for climate change mitigation cannot be overstated. Together, they represented 33 percent of global CO2 emissions in 2007, and just three—Brazil, China and India—were responsible for over 40 percent of global investment in renewable energy by 2010.
In five of the countries—Brazil, India, Indonesia, Mexico and Poland—the studies took the form of an economy-wide analysis of low carbon growth potential, employing a range of data and modeling tools. The governments of China and South Africa conducted their own analyses, but requested the assistance of ESMAP and the World Bank for peer review and international expertise on specific focus areas.
The report Planning for a Low Carbon Future: Lessons Learned from Seven Country Studiesdistils the results of these seven studies, with practical recommendations for government officials, practitioners, and international funding and development agencies. Main messages include the following:
In all the countries studied, there is potential for large-scale reductions in GHG emissions against business-as-usual trajectories while maintaining economic growth targets.However, achieving these reductions will require action across sectors covering energy supply and demand, land use, and forestry, urban development and planning, and sustainable transport.
- In Mexico, a cost effectiveness analysis of 40 near-term priority mitigation measures demonstrated how by 2030 per capita income could grow significantly while GHG emissions could remaining roughly what they were in 2009.
Many interventions will pay for themselves. A significant percentage of the emissions savings come at negative cost, meaning they will actually contribute to economic growth and competiveness. This includes measures such as increasing cogeneration, improving vehicle efficiency, and reducing electricity system losses. However, even win-win investments frequently face hurdles that require a concerted policy response.
- In Brazil, 80 percent of the emission reduction potential under the low carbon scenario was found to have a cost of just $6 per ton of CO2 abated. If adopted, this scenario was expected to not adversely impact growth, and could raise GDP and employment due to the effects of low carbon investments.
Developing countries are already acting. These low carbon studies have contributed to an ongoing process within each country to identify opportunities for green growth, while limiting the risks associated with being locked into high carbon development. Countries are incorporating the findings from this work into their development planning, and this is helping to influence some of their policy and investment decisions.
- In Mexico, the low carbon study has informed new and ongoing investments and programs, including in sustainable transport, energy efficiency, and land-use management.
- In South Africa, the study informed support for the successful power conservation program initiated by national utility Eskom as well as a US$500 million Clean Technology Fund (CTF) investment program.
However, more ambitious global action is still required. Taking many of the actions outlined in the reports, and translating them into a substantial contribution to global climate change mitigation will require stronger efforts at the international level to bring down technology costs, support the development of new technologies, scale up private sector financing, and provide climate finance to developing countries.
- The Government of Indonesia has used the results of the study to prioritize climate financing opportunities, and has successfully sought financing assistance through the CTF and the Forest Carbon Partnership Facility.
Studies are a first step; support for implementation is required. As countries undertake low carbon development studies, and improve their capacity in this area, there is likely to be an increase in demand for policy and technical advice to design and implement measures targeting specific sectors. With a number of initiatives supporting economy-wide planning, follow-up support for more detailed sectoral analysis may be required.
- In Indonesia, the study helped build capacity on climate finance and related fiscal policy issues in the Ministry of Finance, which is now playing an active role in discussions on how to modify incentives for local government in relation to land use and forests.
One of the most important findings that has emerged from the five years of effort that went into these studies is that getting the approach right is as important as the recommendations themselves. The key messages of the report on approach include:
Countries must take the leading role. Demand for low carbon studies starts with the host country, and countries must take a leading role if such studies are to be effectively executed and implemented. Agreeing to the objectives, scope, and process, gaining access to accurate data, and then translating the findings and recommendations from the study into action all require leadership from the host Government.
- In India, the study was coordinated by the Planning Commission, with the Ministry of Power playing a significant role, with the Ministries of Environment and Forests, New and Renewable Energy, and Finance also involved.
Adopt a flexible approach and build a multi-disciplinary team. Every country interested in low carbon planning will have different questions that need answering or sectors that need particular attention. The process must therefore be flexible to these needs and successful at bringing low carbon development or modeling experts together with those responsible for mainstream development planning; a group of low carbon experts working in isolation is unlikely to have much traction.
- In Mexico, an inter-ministerial committee on climate change was established in 2005, which has been instrumental in developing the country’s climate change strategy and which was consulted extensively during the preparation of the low carbon study.
Stakeholder engagement and consensus building is essential. An important and often understated element of this work was the dialogue and consensus building that occurred across different sectors, often involving multiple ministries, agencies, and stakeholders that would not routinely be in contact with each other. Different priorities and interests were reconciled through this process, and the study’s findings became richer and more robust.
- In India, several layers of coordination were necessary as it was clear the low carbon study would significantly benefit from the active involvement of the three levels of governance in the country: federal, state and sub-state.
Investments in data and tools will continue to be needed. In many countries, data availability and accuracy is a major limiting factor. Investments in data collection and reporting, and the modeling tools and capacity needed to use and interpret it, is crucial for governments to be able to undertake low carbon planning and design effective policies and regulations. Furthermore, the tools available to countries could be simplified and made easier to access, with a stronger emphasis on data transparency and openness.
- In India and Brazil, significant effort was devoted to developing analytical models for land use and energy planning that were not available when the studies began.
Low carbon development planning is still a work in progress. While these seven studies were some of the earliest examples, they are by no means the last word on the subject. Lessons will soon emerge from on-going work supported by ESMAP in Morocco, Nigeria, and Vietnam.