Economic Development vis-à-vis Climate Change

By Joseph Mukasa Jagwe |

A crisis

Greenhouse gas emissions will rise by 70% by the year 2050 if no climate action is taken now, elevating the global atmospheric temperature to up to 4oC - 6oC by 2100 (OECD, 2012)

What to be done?

In order to stabilize GHG(Green House Gas) concentrations, huge cuts on emissions is required through the application of cost-effective policies focusing on carbon pricing largely applied in all emission sources. Cap and trade and carbon taxes should embody the global carbon market spiced with standards and regulations, investing in research and development and information.

Illustration of the Green House Effecte
Image Credit: Understanding Global Change

To set in place a stable global carbon market that stabilizes GHG concentrations levels, requires an expenditure of only a tenth of a percent of average global GDP growth for the next 50 years which is about 4% of the world’s GDP by 2072. This is a very small price required in case the GDP in 2072 will be 250% higher than today (OECD, 2012)

Immediately stopping the support of the environmentally-dangerous energy production and consumption, is a huge boost to slashing emissions. Alongside emission caps in developed and least developed countries, scraping off the fossil fuel subsides could reduce the global emissions by 10% by the year 2050 at the same time improving the economy of most countries for example, the household real income of India and China would increase by 2.5% and 0.7% respectively according to Goldstein, 2006 et al, the same could be true with other countries especially in Africa.

peopleHow do we involve stakeholders?

We need to move to a global carbon market that includes as many countries, industries and emitters as possible to achieve at least one large average greenhouse gas collection target at a manageable cost. Reducing global GHG emissions is a goal for developed, developing and least developed countries alike. Even if developed countries reduce their GHG emissions to zero, the global target won’t be achieved due to the increasing global economies emissions by 2050.

If the calculated emission target reductions proposed by many developed and developing countries are implemented, we can witness a very significant global reduction in emissions closer to the needed reductions. This requires a collective effort more so from the developed countries’ leadership in order to deliver their commitments, and spearhead the same to other global countries through financing and technological support which will help other countries to further reduce their emissions.

solar_powerEncouraging innovation in a low carbon technology

First, the international commitments should be nationalized and a stable policy framework that promotes fast development and green technologies penetrations should be encouraged. Minus a stable policy framework, all the technological innovations may come to a standstill.

Illustration of Carbon Pricing
Illustration of Carbon Pricing

If we are to have a green technology revolution, we need a credible carbon price. Putting a price on carbon emissions, for example through taxes or trading limitation programs, will penalize carbon-intensive technologies and create a market for low-carbon technologies such as solar, wind power, geothermal etc and accelerate investment in green energy. Expenditure on global energy research and development could also increase by pricing carbon to keep greenhouse gas concentrations at a moderate level which is a great opportunity.

However, carbon pricing can only be sufficient if accompanied by research and development policies in order to accelerate new green technologies. Governments’ commitments to invest in research and development, is a breakthrough to green technology especially in the power sector and these breakthroughs could reduce the greenhouse emissions tremendously.

There are more innovation opportunities in other sectors like transportation; Scientific research has shown that shifting to electric vehicles will reduce greatly on the emissions of carbon, a leading cause of climate change globally. The transportation sector is known to be one of the largest contributors of carbon emissions in Uganda especially in the cities since most of the vehicles use fossil fuels. If countries like Uganda invest in electric vehicle manufacturing, more jobs will be created, expanding the manufacturing industry and leading to diversification of the economy at the same time significantly reducing carbon emissions.

Green Energy Illustration
Image Credit: The UN

Still, under transportation, city authorities like Kampala City Council Authority (KCCA) should encourage the use of public transport. For instance, ten cars each carrying one passenger emit significantly high carbon emissions compared to one bus that carries 40 or more passengers. In America, bus transit is estimated to emit 33% lower greenhouse gases per passenger mile than an average single user vehicle (Rubin et al, 2010). This also reduces on the traffic congestion in the cities, easing mobility, saving money and time for travelling to workplaces thereby improving the economy since there is smooth mobility of people with their goods, reducing more economic risks like road accidents at the same time reducing carbon emissions significantly.

Additionally, climate change has a disproportionate impact on the people. Poor regions of the world are more impacted than the rich and yet they contribute less on the emissions. Many respiratory diseases resulting from air pollution are prevalent in low developed countries. Effects of floods, drought and insufficient patterns of rains affect the poor. With the world investing in green energy, it will reduce on economic loss, disease outbreak especially among the poor hence improving on the economy of the poor. In most countries, industrialization is situated in locations nearer to the energy sources as compared to rural areas. With clean energy that is widely distributed, it’s an opportunity for people in rural areas to also tap on the opportunities of industrialization.

 How can fears of competitiveness losses be addressed?

Many ambitious countries to climate action are worried that their industries may suffer competitive losses minus similar ambitious efforts from other countries. In fear of such losses, these countries have in turn exempted their industries from emission reductions and relaxed their emission reduction targets which could increase the cost of achieving the emission target globally. However, if all industrialized countries act, this leakage rate would be reduced. Generally, the most effective way to tackle carbon leakage is to ensure broad participation in actions to reduce emissions by all large emitters.
As the world is strengthening its commitment to climate action, many countries believe that green growth is inevitable to rebuilding sustainable economies. Green and growth move together. All countries must develop green growth strategies alongside working on economics of climate change to examine aspects of employment and job creation and the role of eco-innovation.  
It’s evident that the least industrialized countries emit little GHG to the atmosphere as compared to the most industrialized and yet, the poor countries are the most affected by the impacts of climate change. Therefore, our prayer is that all the parties in COP 27 strongly commit themselves to implement the agreed targets of emission reductions especially the most industrialized countries. It is through the collective efforts that the world will achieve the global emission reduction target.

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