The Low Carbon Economy:

Transitions and Opportunities

Dr David Ockwell
October 2010 d.g.ockwell@sussex.ac.uk

Sussex Energy Group SPRU - Science and Technology Policy Research

Climate change at the University of Sussex

Department of Geography SPRU - Science and Technology Policy Research Sussex Energy Group Tyndall Centre for Climate Change Research New climate change MSc courses

Sussex Energy Group SPRU - Science and Technology Policy Research

Postgraduate study in Climate Change

MSc in Climate Change and Policy MSc in Climate Change and Development

www.sussex.ac.uk/climatechange
Sussex Energy Group SPRU - Science and Technology Policy Research

climate@sussex.ac.uk

Winning the global race to a low carbon economy

Increasing opportunities of low carbon economy

Sussex Energy Group SPRU - Science and Technology Policy Research

Winning the global race to a low carbon economy

Strong, certain, long term political leadership Increasing opportunities of low carbon economy

Sussex Energy Group SPRU - Science and Technology Policy Research

Winning the global race to a low carbon economy

Strong, certain, long term political leadership Increasing opportunities of low carbon economy

Forward looking, strategic business leadership

Sussex Energy Group SPRU - Science and Technology Policy Research

Overview
1. A low carbon economy is the only viable economy 2. A low carbon economy is an opportunity 3. Making the transition: Technology transfer: building low carbon innovation capacities

Sussex Energy Group SPRU - Science and Technology Policy Research

1. A low carbon economy is the only viable economy

Sussex Energy Group SPRU - Science and Technology Policy Research

Decoupling energy from economic growth?

Economic growth historically coupled with energy use Energy use predominantly based on fossil fuels Continued economic growth without climate change requires decoupling i.e. increased unit GDP per unit of energy
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Sussex Energy Group SPRU - Science and Technology Policy Research

Energy

Failure of traditional economic theory

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The solution?

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The solution?
Steady-state economy

or
Decarbonise energy supply
Sussex Energy Group SPRU - Science and Technology Policy Research

The solution?
Steady-state economy

or
Decarbonise energy supply
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2. A low carbon economy is an opportunity

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An opportunity for political leadership

Leading in Latin America Leading internationally Leading domestically

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Reaping the economic benefits

Strong, certain, long term policy environment vital for:

New investment Green Jobs Jobs in renewable energy > 3 million globally (REN21 2010) Brazil and China have the largest share German renewable energy industry investments in 2009 worth $23 billion (while economy contracted 5%). Sector employs 300,500 people, almost double the 2004 figure (UPI
2010)

Chinese government spent $34.6 billion in 2009 to propel its low-carbon economy (Guardian 2010)
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An opportunity for business leadership, Green Jobs and profit

Energy supply based on renewables will ensure products continue to sell internationally

Competitiveness of global businesses now measured based on

strategic positioning to respond to future carbon limits

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Risks & Opportunities of Carbon Constraints

(Source: WRI 2001)

DECREASING RISK FROM CARBON CONSTRAINTS

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Additional cost per vehicle

3. Making the transition

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Technology transfer: Building low carbon innovation capacities

International policy increasingly facilitating finance for low carbon technology transfer Move toward facilitating international collaboration To properly benefit from this, must focus on knowledge and skills transfer, not just hardware

Sussex Energy Group SPRU - Science and Technology Policy Research

Technology push: Building low carbon innovation capacities

Capacities to adopt, adapt, develop, deploy and operate low carbon technologies effectively within the specific physical and socio-economic contexts of an individual country or region
Sussex Energy Group SPRU - Science and Technology Policy Research

Building innovation capabilities

Technology suppliers
Supplier firms engineering, managerial and other technological capabilities Flow A

Technology transferred
Capital goods, services & designs Skills for operation & maintenance: Know how

Technology importers
New production capacity

Flow B

Flow C

Knowledge & expertise: Know why

Accumulation of innovation capabilities

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Hardware imports -> knowledge and skills -> innovation capacities

Sussex Energy Group SPRU - Science and Technology Policy Research

Key policy concerns for developing countries

1. Ensure technology imports have maximum impact on innovation capabilities 2. Set up bespoke mechanisms for developing innovation capabilities 3. Focus collaborative efforts at the right stage along the research, development, demonstration and deployment spectrum 4. Base this on careful analysis of existing capabilities within specific country, regional & local contexts

Sussex Energy Group SPRU - Science and Technology Policy Research

Key policy concerns for developed countries / international firms

1. Maintaining international competitive advantages 2. Economic benefits from accessing new markets

Sussex Energy Group SPRU - Science and Technology Policy Research

Overview
1. A low carbon economy is the only viable economy 2. A low carbon economy is an opportunity 3. Making the transition: Technology transfer: building low carbon innovation capacities

Sussex Energy Group SPRU - Science and Technology Policy Research

Winning the global race to a low carbon economy

Strong, certain, long term political leadership Increasing opportunities of low carbon economy

Forward looking, strategic business leadership

Sussex Energy Group SPRU - Science and Technology Policy Research