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Decarbonizing Development - Three Steps to a Zero-Carbon Future



“This report explores the types of climate policy packages needed to achieve a complete decarbonization of our economies by 2100, taking into account the many market failures, imperfections, risks, undesired distributional effects, and political economy obstacles that such a deep transition entails. It also offers a possible road map for countries that are planning their transition toward full decarbonization.

 Plan ahead with an eye on the end goal.

As a first step, those countries need to set up long-term objectives - say to 2050 - that are consistent with the end goal of full decarbonization. Although those objectives need not be commitments, they make it possible to work backward and identify what needs to be done immediately to avoid locking in carbon-intensive patterns and increasing the odds of costly changes later on. At the same time, countries need to identify mitigation actions that bring economic, social, or health co-benefits and are therefore desirable for development and improved welfare.

 From there, countries can design sector-specific shorter-term targets - to 2025 or 2030 - and establish a way to track progress on the four pillars of a zero-carbon strategy: (a) decarbonization of electricity, (b) massive electrification and a switch tocleaner fuels, (c) improved efficiency and reduced waste in all sectors, and (d) improved carbon sinks. A short-term goal expressed as an economy-wide emission target is also useful but cannot replace the sectoral targets, since it could be reached with marginal actions that do not contribute sufficiently to meeting the long-term goal. 

Go beyond prices.

Then, countries need to craft a comprehensive policy package that includes the following elements:

  •  Getting prices right - including pricing carbon, which is both good fiscal and  envirenmental policy - represents an efficient way to raise resources and can be  designed to be easier to administrate and harder to evade than other taxes. It is    relevant for countries at all income levels, provided that it raises revenues and that  those revenues are used to support poor and vulnerable people, to reduce distortive  taxes on labor and capital, and to invest in the future (such as in infrastructure or  education).  
  •  Measures to complement (or, if need be, substitute for) carbon pricing.
     Innovation incentives will be crucial in countries at the technology frontier.Labels,  performance standards, fiscal incentives, and financial instruments have proven track  records in countries at all income levels and can ensure that the best technologies are  deployed to reduce energy demand and carbon emissions. Those instruments are not  only more efficient than a carbon price in triggering behavioral changes in some  sectors, but they also reduce the level of the carbon price that is needed to achieve  decarbonization, making it more acceptable, credible, and realistic. And making  financing available will be key to implementation. 

Protect poor people and avoid concentrated losses.

Finally, the policy package must also include measures that make it attractive for the broader population and that avoid impacts that appear unfair. Understandably, analyses of climate policy packages typically focus on the design of the climate side of the package - the pricing instruments, the role of regulation and norms, and the support to innovation and green technology. However, the review undertaken in this report suggests that a large share of the challenge lies in the political economy. Success in stabilizing climate change will be largely determined by the ability of those accompanying policies to ensure that the decarbonization of the economic system contributes to economic development and the sustain-able eradication of poverty.

Decarbonizing development is necessary to stabilize climate change. All countriesare well-advised to start now, but not all will. Some countries will choose to embark on this journey sooner than others. To those countries, our message is that starting early in keeping an eye on the end goal is the way to go, along with a policy package that goes beyond prices to trigger changes in investment patterns, technologies, and behaviors and that smooths the transition for those who stand to be most affected - keeping in mind that political economy is what reforms live or die by.”

Quelle: The World Bank