THE NEW ECONOMY: ALIGNING GROWTH, CLIMATE ACTION

AND SUSTAINABLE DEVELOPMENT

Manish Bapna | Executive Vice President and Managing Director, WRI

May 30, 2017

@ManishBapnaWRI

Led by a Global Commission

Made up of former heads of government, finance

ministers, CEOs of major companies, Mayors,

heads of international economic institutions, etc.

Commissioned in 2013 by 7 countries

Colombia, Ethiopia, Indonesia, Norway, Sweden,

South Korea, United Kingdom

Building the evidence base

3 major annual reports and 42 working papers

and country case studies so far.

THE NEW CLIMATE ECONOMY PROJECT

OTHER WRI RESEARCH

THE FALSE DILEMMA

vs

Promoting economic

growth

Fighting climate

change

“WIN-WIN”

PRO-ENVIRONMENT

GROWTH

A DIFFERENT GROWTH PATHWAY

NEGATIVE

EXTERNALITIES

TODAY

LIMITS TO

GROWTH

Growth

performance

Good

Bad

Bad Good

Environmental performance

3 KEY SYSTEMS AND 3 KEY DRIVERS

Cities Land use Energy

Resource

productivity

Innovation

Infrastructure

investment

Higher quality, more resilient, inclusive growth

THE NEW ECONOMY

Photo: Flickr / Miroslav Petrasko

1. Cities

2. Land-Use

3. Energy

4. Financing Sustainable Infrastructure

5. United States

NONE OF THE WORLD’S TOP 50 CITIES BY

POPULATION MEET WHO AIR QUALITY STANDARDS

Source: World Health Organisation:

http://apps.who.int/gho/data/node.wrapper.ENVHEALTH3

North America

Latin AmericaEurope & Central Asia

Middle-east & North Africa

East Asia & Pacific South Asia

WHO air

quality

standard

PM10

TRAFFIC CONGESTION COSTS SOME CITIES MORE

THAN 4% OF GDP

Sources: IBM Institute for Business Value, Smarter cities for smarter growth. Li-Zeng

Mao, Hong-Ge Zhu, and Li-Ren Duan (2012) The Social Cost of Traffic Congestion and

Countermeasures in Beijing. Sustainable Transportation Systems: pp. 68-76.

CITES: UNDERSERVED

Source: WRI

up to 70% of city

residents lack

access to one or

more core services

10

In 2012 482m urban residents lacked access

to modern fuels

In 2015 140m urban residents did not have reliable, clean water

COMPACT CITIES

Source: LSE research, drawing on data from Atlanta Regional Commission (2014), Autoritat del Transport Metropolita

(Area de Barcelona) (2013), GenCat (2013), UCSB (2014), D’Onofrio (2014), based on latest data.

Atlanta’s built-up area

Population: 5.26 million

Total area: 16,605 km2

Urban area: 7692 km2

Transport emissions: 6.9 tonnes CO2 p.c.

ATLANTA

Barcelona’s built-up area

Population: 5 million

Total area: 3263 km2

Urban area: 648 km2

Transport emissions: 1.2 tonnes CO2 p.c.

BARCELONA

HOUSTON AND COPENHAGEN: CONTRAST SHOWS ECONOMIC

AND CARBON VALUE OF MASS TRANSIT AND COMPACTNESS

Source: Laconte, P., Urban and Transport Management - International Trends and Practices, in International Symposium "Sustainable

Urban Transport and City. 2005, Tongji University and Nagoya University: Shanghai, carfreeinbigd.com, chron.com/thehighwayman,

ec.Europa.eu for emissions for Copenhagen, World Bank for emissions for Houston

Houston Copenhagen

Population density: 3,500 per sq mile

~4% of people use public transport, 95%

of trips are by car

14% of local GDP spent on transportation

Emissions per capita (tCO2e/capita): 14.1

Population density: 17,000 per sq mile

~46% of people use public transport,

cycling also common

4% of local GDP spent on transportation

Emissions per capita (tCO2e/capita): 4.7

SMART TRANSPORT SYSTEMS HAVE TAKEN OFF WORLDWIDE

Source: Dalkmann, WRI

Sustainable Transport Adoption

LOW-CARBON TRANSPORT, BUILDINGS, AND WASTE

SECTORS ARE A US$17 TRILLION OPPORTUNITY TO 2050

Source: Gouldson, A., Colenbrander, S., Sudmant, A., Godfrey, N., Millward-Hopkins, J., Fang,

W. and Zhao, X., 2015. Accelerating Low-Carbon Development in the World’s Cities. NCE, 2015.

Waste (all values are less than -0.01

Transport – freight

Transport – passenger

Buildings – commercial

Buildings – residential

Total net NPV

Total net NPV – high learning

GROWING CITY LEADERSHIP

7,000+ cities have joined the

Global Covenant

of Mayors

Source: Compact of Mayors

CITY LEADERSHIP: CHINA PILOT ON LOW CARBON CITIES

First batch (2010)

Second batch (2012)

Third batch (2017)

CITY LEADERSHIP: CHINA’S TRANSIT METROPOLIS

PROGRAM

0%

Guangzhou

Shanghai

Tokyo

Paris

Seoul

20% 40% 60% 80% 100%

Beijing

Public Transit

Others

CITIES: RECOMMENDATIONS

• Commit to a connected, compact and coordinated urban

development model, centered on mass transport,

building efficiency and resource-efficient service delivery.

• Identify ways to increase locally generated revenues to

finance and incentivize smarter, more compact and

resilient urban development. Strengthen the

creditworthiness of cities.

Photo: Marta Obelheiro, EMBARQ Brasil

THE NEW ECONOMY

1. Cities

2. Land-Use

3. Energy

4. Financing Sustainable Infrastructure

5. United States

Photo Source: CIFOR Flickr/Photograph by Kate Evans

LAND USE INTERVENTIONS COMPRISE 15-35% OF THE

MITIGATION POTENTIAL TO GET ON A 2°C PATHWAY BY 2030

Source: Emissions estimates: IPCC AR5; New Climate Economy analysis based on

expert input and multiple data sources

COMING SOON: NCE LAND USE SPECIAL INITIATIVE

Boost yields: crops,

livestock, forest products

Avoid

deforestation

Restore forests

“Produce”

“Protect”

Limit expansion to just

restored “degraded land”

“Prosper”

Reduce growth in consumption

(e.g., reduce food loss and

waste, shift diets)

GLOBAL ANNUAL TREE COVER LOSS REMAINS HIGH

TREE COVER LOSS INCREASING IN TROPICAL

COUNTRIES OUTSIDE BRAZIL & INDONESIA

THE TROPICAL FOREST ALLIANCE: A NEW COALITION TO END

NATURAL FOREST LOSS BY 2030

Source: Tropical Forest Alliance 2020 website. See website for full list of partners.

Private Sector

Public Sector

Civil Society

14 countries

36 organisations38 companies

OVER 300 MILLION HA OF DEGRADED LAND COULD BE

RESTORED IN SUB-SAHARAN AFRICA. CASE STUDY: NIGER

Source: WRI analysis using the following datasets: Protected areas: IUCN and UNEP. 2013. The World Database on Protected Areas (WDPA).

Cambridge, UK: UNEP-WCMC. Croplands: Fritz, S. and L. See. 2013. Global Hybrid Cropland. Laxenburg, Austria: IIASA and IFPRI.

Precipitation isohyets: FAO/UNEP Desertification and Mapping Project. 1986. Africa Mean Annual Rainfall. Geneva, Switzerland: UNEP/GRID.

Impact for Niger Zinder case from worldagroforestry.org.

1980s

1980s Present Day

• Improved productivity: 5 million hectares restored – farmers produce 100 kg/hectare

more now than before

• Reduced poverty: more than doubled farm income for over one million households

• Reduced emissions: Agroforestry technique sequesters 1.6-10 tCO2e/ha

AMBITIOUS GLOBAL TARGETS EXIST

Photo: Flickr/CIFOR; Source: WRI

150mhectares under restoration by 2020

Bonn Challenge

350mhectares under restoration by 2030

NY Declaration

27

63.3M HECTARES

COMMITTED

BUT RESTORATION MONITORING WITH GOOD RESOLUTION AND

FREQUENCY IS A GAP

Agricultural greenhouse gas emissions, Gt CO2e/year (2050)

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Consumption

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Focus area

TACKLING AGRICULTURE-BASED GHG EMISSIONS

* Could be reduced by forest landscape restoration on agricultural land “freed up” by the other menu item strategies

Source: GlobAgri-WRI model (developed by INRA, CIRAD, and WRI)

WHY DOES FOOD LOSS AND WASTE MATTER?

Source: FAO (Food and Agriculture Organization of the United Nations). 2011. Global food losses and food waste –

extent, causes and prevention. Rome: UN FAO; FAO. 2015. Food wastage footprint & climate change. Rome: UN FAO.

Food loss and waste is greater nearer “the fork” in developed regions and nearer “the farm” in developing regions

Note: Numbers may not sum to 100 due to rounding.

WHERE IS FOOD LOSS OR WASTED?

Source: WRI analysis based on FAO. 2011. Global food losses and food waste—extent,

causes and prevention. Rome: UN FAO.

Percent of kcal lost and wasted, 2009

For every £1 invested in curbing household food waste,

more than £250 was saved

REDUCING FOOD LOSS AND WASTE RESULTS IN

HIGH ECONOMIC RETURNS

Photo: The times UK; Source: Champions 12.3

Catalyzed a 21%reduction in household

food waste (2007-2012)

BUILDING A MOVEMENT: CHAMPIONS 12.3

SHIFTING DIETS – THE PROTEIN SCORECARD

Sources: GlobAgril-WRI model developed by CIRAD. Princeton University. INRA and

WRI (GHG data): USDA and BLS (2016) (US retail price data).

WE GET NEARLY ENOUGH PROTEIN FROM PLANTS

Source: WRI/Shifting Diets

Gra

m o

f pro

tein

con

sum

ptio

n pe

r ca

pita

, per

day

, 200

9

BETTER BUYING LAB

LAND USE: RECOMMENDATIONS

Photo: Flickr/CIFOR

• Halt the loss of natural forests by 2030

• Restore at least 500 million hectares of lost or

degraded forests and agricultural land by 2030,

• Cut in half per capita global food waste at the retail

and consumer level, and reduce food losses along

production and supply chains by 2030

ENERGY

1. Cities

2. Land-Use

3. Energy

4. Financing Sustainable Infrastructure

5. United States

Photo: Flickr/DFID

~ 2CWell below

2C

~ 2C

Increase in share

of zero-carbon1

energy

% points p.a.

1 or

more

< 1

< 3 3 or more

Improvement in energy productivity% p.a.

INDCs: 2013-2030

Historical: 1980-2014

Well above

2C

WE MUST ACCELERATE THE PACE AT WHICH WE DECARBONIZE

ENERGY SUPPLY AND IMPROVE ENERGY PRODUCTIVITY

Source: Energy Transitions Commission (2017), Better Energy, Greater Prosperity

COAL AND UNCONVENTIONAL FOSSIL FUEL RESERVES FAR

EXCEED THE CARBON BUDGET

Source: IPCC Working Group I; IIASA Global Energy Assessment 2012, BGR, 2013; BP

Statistical Review of World Energy, 2014; IEA, 2013; World Energy Council, 2013

HIGH DEMAND FOR ENERGY

1.2 billion

people lack

electricity

access

Source: IEA, World Energy Outlook 2016 Photo: Power for All 41

AFRICA’S ENERGY GAP

Source: 2015 Africa Progress Report: POWER, PEOPLE, PLANET. Available at:

http://www.africaprogresspanel.org/publications/policy-papers/2015-africa-progress-report/

http://www.africaprogresspanel.org/publications/policy-papers/2015-africa-progress-report/

THE COST OF WIND AND SOLAR CONTINUES TO FALL

Source: © OECD/IEA Next Generation Wind and Solar Power: From Cost to Value,

IEA Publishing. Licence: www.iea.org/t&c

Indexed cost of onshore wind and utility-scale solar PV

MORE THAN HALF OF NEW ELECTRICITY SECTOR

INVESTMENT IN 2016 WAS IN RENEWABLES

Source: Frankfurt School-UNEP Centre/BNEF. 2017.

Coal21%

Gas14%

Other flexible capacity

2%Nuclear4%

LargeHydro

6%

Renewables, excluding large hydro

53%

13

4

8

20

47

HALVING CARBON EMISSIONS BY 2040 IS WITHIN OUR REACH IF WE ACT

NOW TO IMPLEMENT 4 INTERDEPENDENT TRANSITION STRATEGIES

Source: Energy Transitions Commission (2017), Better Energy, Greater Prosperity

WB2C 2040

Acceleration in the pace of

energy productivity improvement to 3% per annum

2

Business as usual 2040

48%

15%

30%

7%

Transition strategy

Annual emissions, 2040, GT CO2e

Illustrative path to WB2C scenario

1 Decarbonization of power combined with extended electrification

2 Decarbonization of activities which cannot be cost-effectively electrified

4 Optimization of fossil fuels use within overall carbon budget constraints

3

RENEWABLE ENERGY IN THE NDCS

80% of NDCs

have a

renewable

energy target

Source: WRI Analysis; Photo: Flickr / Oregon Department of Transportation

Country Target

China Around 20% non-fossil fuels in national energy consumption 2030

Brasil 45% of renewables in the energy mix by 2030

India 40% cumulative electric power installed capacity from non-fossil fuels by 2030

Indonesia At least 23% from new and renewable sources by 2025

JapanRenewables will comprise approximately 22% - 24% of Japan's total power

generation in 2030.

MexicoThe increase of clean energy sources in the national electricity generation mix to 35%

by 2024

European

UnionAt least 27% share of renewable energy consumption by 2030 (2014)

United StatesIncrease the US share of renewables, beyond hydropower, in the electricity generation

mix to the level of 20% by 2030 (June 2015)

RENEWABLE ENERGY TARGETS IN THE NDCS

Source: WRI Analysis

INDIA’S AMBITIOUS SOLAR TARGETS

Source: India's Ministry of New and Renewable Energy (MNRE); Bridge to India

Note: All years in the chart are fiscal years: 1 April – 31 March

ENERGY: RECOMMENDATIONS

Photo: Flickr / DFID

• Accelerate the shift away from polluting coal-fired power generation, with

a global phase-out of unabated fossil fuel power generation by 2050.

• G20 and other countries should converge their energy efficiency

standards to the global best by 2025, and establish a global platform for

alignment and improvement of standards.

• Development banks should scale up collaboration with governments and

the private sector, and their own capital commitments, to reach US$1

trillion of investment per year in clean energy.

THE NEW ECONOMY

1. Cities

2. Land-Use

3. Energy

4. Financing Sustainable Infrastructure

5. United States

Photo: Flickr/The Danish Wind Energy Association 50

Boost global demand and activity

in the short-term and lay

foundations for sustained long-

term growth.

Implement the Sustainable

Development Goals through

inclusive growth and access

to basic services.

Cut emissions to achieve

net zero by 2050, and

increase resilience &

adaptation.

Sustainable infrastructure is at the heart of

solutions to all three.

THE WORLD’S THREE KEY CHALLENGES

2016 NCE REPORT: SUSTAINABLE INFRASTRUCTURE

• In next 15 years we will develop more infrastructure than entire

current stock – we need to ensure it is sustainable.

• Sustainable infrastructure includes:

– Clean and efficient energy systems, public transport, efficient buildings,

water supply and sanitation

– And also natural infrastructure (such as forest landscapes, wetlands and

watershed protection)

70% OF COMING INFRASTRUCTURE INVESTMENTS WILL BE

MADE IN DEVELOPING AND EMERGING ECONOMIES

Source: Global Commission on the Economy and Climate, 2016, based on Bielenberg et

al. (2016) and Bhattacharya et al. (2016)

Percentage of projected infrastructure demand by sector and income group

(2015-2030)

INVESTING IN SUSTAINABLE INFRASTRUCTURE REQUIRES A SHIFT

IN INVESTMENT BUT DOES NOT NEED TO COST MUCH MORE

Note: Δ is the mathematical symbol for change. Source: Global Commission on the

Economy and Climate, 2016 and 2014, and Bhattacharya et al., 2016

Infrastructure spending needed for a 2°C scenario (2015-2030, percentage change)

THE 2016 GLOBAL COMMISSION ACTION AGENDA

TACKLE FUNDAMENTAL PRICE DISTORTIONS

Source: World Bank Carbon Pricing Watch 2017

Carbon pricing initiatives underway

THE FINANCIAL SECTOR NEEDS TO BE FIT FOR PURPOSE:

A MOMENTOUS SHIFT IN AWARENESS OF CLIMATE-RELATED RISKS

Sources: Bank of England; Financial Times; International Institute of Sustainable

Development; Bloomberg; G20.org

The Bank of England is studying the impact of climate risks

on the UK financial system

China is developing a “green financial system” including

legal frameworks, fiscal and financial policy incentives, and

information infrastructure

G20 Finance Ministers have commissioned an FSB Task

Force to look into climate-related financial risks; introduced

new focus on green finance

Investors themselves are shifting: over 400 investors with

$25 trillion in AUM joined Investor Platform for Climate

Actions; divestment commitments, Norwegian SWF.

TRANSFORM THE FINANCIAL SYSTEM TO DELIVER THE SCALE

AND QUALITY OF INVESTMENT NEEDED

“Increasing transparency makes markets more efficient, and economies more stable and resilient.”

-Michael Bloomberg, Chair of Task Force on Climate-Related

Financial Disclosures

Photo: Flickr/World Bank Photo Collection

BOOST INVESTMENT IN CLEAN TECHNOLOGY R&D AND

DEPLOYMENT

Source: Global Commission on the Economy and Climate, 2014

THE NEW ECONOMY

1. Cities

2. Land-Use

3. Energy

4. Financing Sustainable Infrastructure

5. United States

Photo: Flickr / Phil Roder

A NEW ADMINISTRATION

Photo: Flickr / Matt Johnson

U.S. CARBON DIOXIDE EMISSIONS HAVE FALLEN WHILE

ECONOMIC GROWTH HAS CONTINUED

Source: U.S. Energy Information Administration and U.S. Bureau of Economic Analysis

HOW DOES THIS COMPARE WITH OTHER COUNTRIES? GHG

EMISSIONS AND ECONOMIC GROWTH

PRESIDENT TRUMP HAS ALREADY STARTED TO ROLL

BACK CLIMATE AND CLEAN ENERGY PROGRESS

Source: WRI

IF SUCCESSFUL, THESE ACTIONS MAY SET BACK THE

NATION’S EFFORTS TO REDUCE GHG EMISSIONS

Source: Rhodium Group Analysis

WILL IT BE POSSIBLE TO CLOSE THE GAP?

Source: Rhodium Group Analysis

• States and Cities

• Private sector

• Federal

PROJECTIONS ARE NOT ALWAYS ACCURATE:

ACTUAL VS PROJECTED US CO2 EMISSIONS

Source: U.S. EIA

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2005 2010 2015 2020 2025 2030 2035

AEO2006

AEO2008AEO2010AEO2012AEO2014AEO2016AEO2017Actual Emissions

WILL TRUMP WITHDRAW THE US FROM THE

PARIS AGREEMENT?

Photo: COP Paris