What is Climate Change

Since the beginning of the Industrial Revolution in the mid-18th century, humans have largely altered the environment and to some extent the climate system. Their activities such as the combustion of fossil fuels, burning of biomass and continued growth of industries has led to an astronomical increase and concentration of aerosols, greenhouse gases (GHGs) and chlorofluorocarbons (CFCs) in the atmosphere. Furthermore, agricultural practices which lead to changes in land use patterns especially deforestation for large- and small-scale agriculture have replaced forests’ biodiversity with increasingly monoculture crop systems. All these human activities have affected the physical and biological properties of the earth’s surface with a cascading effect on the local, regional and global climate. 

However, it is important to keep in mind that in the past, our planet has naturally gone through cycles of warming and cooling, but the changes seen today are happening at a much faster scale than would be expected in a natural cycle. This has led to the emergence of other hypotheses which propose to explain all or most of the observed increase in global temperature including: That the warming is within the range of natural variation, the warming is a consequence of coming out of a prior cool period as the little ice age, and that the warming is primarily a result of variances in solar irradiance, possibly via modulation of cloud cover. For instance, (Oreskes, 2004) said the observed warming actually reflects Urban Heat Island, as most readings are done in heavily populated areas which have been expanding over the last few decades with growing population.

Agriculture – crops, livestock, fisheries and forestry – contributes about 31 per cent of the total emissions of GHGs in the atmosphere. Carbon dioxide, the most important anthropogenic GHG, is released from deforestation when trees are cut down and allowed to decay thereby oxidizing the stored carbon which is then released in the atmosphere. Cultivating the soils after deforesting (land use change) facilitates the oxidation of some organic matter in the upper layer and releases it into the atmosphere. Methane, the second major GHG gas, is released from rice agriculture, conversion of wetlands and livestock farming. Nitrous oxide originates mainly from soils and the oceans. Nitrous oxide from humans in the agriculture sector originates from fertilizer use. 

The GHG Effect
The natural greenhouse effect is necessary to support life in our planet. Without global warming occurring naturally, the earth’s surface would be about 35o C cooler on average. The climate change problem is being caused by what scientists call the enhanced GHG effect. This is where over the past 200 years, human activities such as burning of fossil fuels and destruction of forests (especially tropical) has caused massive concentrations of heat-trapping GHGs in our atmosphere. With more of these gases in the atmosphere, more infrared radiation is re-radiated back to earth’s surface as heat when some of the incoming solar radiation is absorbed by the earth’s surface and radiated back into the atmosphere in the form of infrared radiation. This is causing what is referred to in the scientific community as climate change.

Making Hay While the Sun Shines

Nairobi is a rapidly growing capital city in Kenya anticipating massive new investments in land use patterns, infrastructure for transportation, water and energy as well as building stocks both for residential and commercial use in the next three to four decades. The city’s governor, Dr. Evans Kidero understands that if Nairobi is to contribute to sustainability in its three spheres – economic, environmental and social-cultural – time is now ripe to start planning in anticipation of increased urbanization by the year 2050 coupled with the residents’ increased  income levels. 

The governor envisions cementing his legacy of being the first elected official in one of the city’s newest political office by planning a compact, mixed use and high-density urban neighbourhood design that makes intra-transit in the city more economic and where proximity to work places for residents, schools, shops and services are closer. His intentions will not only cut future greenhouse gas emissions and energy use per capita as compared to other sprawling cities, but also significantly cut the costs associated with mobility, commuting times, minimize traffic accidents and associated air quality problems. 

People will not see the need of using personal vehicles but rather opt for public transit systems, cycling and even walking. This will have dramatic reductions on the probable congestion on the roads, pollution and illnesses all which serve to undermine the performance of the country’s main economic hub and the capacity for changing in the future costly, high-emitting and non-climate resilient infrastructure. As is the case in many other developing countries, the high population growth rates are happening in urban areas where more energy per capita is consumed than in rural areas. The governor’s plans will save enormous future energy costs and achieve continued emissions reductions for many years to come.     

The recent financial economic crisis we all have experienced will not help the governor of Nairobi city drive capital investments towards a long term sustainable perspective. This is especially so because supporting a more dense and mixed urban form is very much associated with extra high costs for long-lived capital stock – like roads, buildings, and new infrastructure – and high public pressure. The governor will have to rely on multilateral donors and development agencies to make his technical plans and infrastructure financing a success. For the governor, the real challenge is to start changing the city residents’ urban lifestyle – how people live, work and play their daily lives.   

Governor Kidero’s plans will achieve sustainability by eliminating the probability of smog in the capital which is generated by burning combustion fuel especially from fossil fuel-fired power generation plants and car engines. When air quality is improved and the cost of living is reduced, the health of the local ecologies and population also improves so does the quality of underground water reservoirs. The productivity of the urban populace as workers also improves. The collective atmosphere of the urban environment also gets better and becomes more attractive. When the city becomes more liveable and efficient in its day-to-day operations, it will be much easier to attract and retain highly qualified urban professionals in diverse sectors and industries. Housing will become more affordable, businesses more competitive and new job opportunities and skills will be created. As such, money and skills will not flow out of the urban communities for instance in the form of energy purchases from fuel suppliers and utilities; rather, it will be retained within.

This blog is an entry to the Masdar’s 2014 Engage Blogging Contest: Smart Cities and Sustainable Development. The contest’s 2014 Engage Page with other submitted blog entries can be found at http://www.masdar.ae/en/#adsw/engage

Low Emissions Development (LED)

In the wake of the adverse effects of climate change being witnessed across the world, countries are being advised to pursue greener pathways which are not only low emitters of green house gases, but also not dependent on fossil fuels to drive their growth. As such Clean Technology (Cleantech) has significantly gained prominence in the post-2015 development agenda and is poised to gather more preference in the transitioning and emerging economies. Hence, some regard cleantech as the beginning of a revolution that will change the places where we live and work, the products we manufacture and purchase, and the development plans of cities, regional governments, and nations around the globe. 

Wikipedia defines cleantech as a diverse range of products, services, and processes that harness renewable materials and energy sources, dramatically reduce the use of natural resources, and cut or eliminate emissions and wastes. Cleantech is relatively a new phenomenon of economic development and it is increasingly being recognized as a vital component for economic growth and has seen a significant rise in economic activities. According to clean energy periodic reports, the markets for clean energy technologies grew from less than USD7 billion in 2001 to over USD188 billion in 2010. This staggering increase is a result of the growing constrains to economic growth due to environmental degradation, high oil prices, scarcity of natural resources and climate change.

Cleantech includes a wide verity of environmental, social and economic activities predominantly comprising the fields of:

  1. Recycling – reuse of resources in an efficient way reducing the cost of production and environmental pollution.
  2. Renewable energy – introduce new forms of energy production wind power, solar power, biomass, hydropower and biofuels.
  3. Information technology – The use of computerized systems and information processing to reduce the use and strain imposed on natural systems, such as computerized watering systems etc.
  4. Green transportation – transport with low impact on the environment such as non-motorized transport, green vehicles, Car Sharing, and urban transport systems that are fuel-efficient, spacesaving and promote healthy lifestyles.
  5. Green chemistry – design of products and processes that minimize the use and generation of hazardous substances. Green chemistry seeks to reduce and prevent pollution at its source.
  6. Energy efficiency technologies – reducing energy consumption e.g. Lighting- Compact Fluorescent Lights or LED lighting.
  7. Water technologies – water desalination, water purification, waste water treatment, etc.
  8. Green buildings – Architecture, design, construction and maintenance of building that hold a small environmental footprint.

 Cleantech will bring thus about Low Emissions Development (LED) which spurs many positive impacts to national development goals. It promotes wider sustainable development benefits, which helps address pressures related to economic growth, population growth, urbanization, and resource use. A LED trajectory contributes to global emissions reductions. In this sense, it is a mechanism for mitigating climate change. 

One of the main arguments why is it useful for countries to consider LED while achieving their national development goals is that if current global trends of emissions continue, serious climate change impacts will affect countries. The distribution of impacts is likely to be unequal and tilted against many of the world's poorest regions, which have the least economic, institutional, scientific, and technical capacity to cope and adapt.

LED can help prevent and manage heat waves and droughts that involve huge risks for reduced agriculture and harvest losses, forest fires, and heat-related deaths. It also can help prevent and improve water stress and pollution. This will contribute to increased access to safe and clean drinking water, which prevents health risks. Furthermore, LED policies can help manage a wetter climate that will cause similar social and economic costs, such as increased flooding in many vulnerable urban areas.

LED can thus help turn the challenges of developing countries into opportunities. It should be seen as a development approach that assists countries to achieve sustainable economic growth and improve living standards while slowing the rise of greenhouse gas emissions. National LED strategies should be suitable to country-specific needs and consistent with a country's sustainable development priorities.

Challenges of LED
Although there are many benefits associated with a transition to low emissions development, there still remain challenges. Questions policymakers will ask themselves include: What sectors will have to adapt? How much will this cost? What might be the social costs of a transition to low emissions development?

Another challenge is that it will take increased initial investments in urban infrastructure, electricity generation, and energy efficiency. In addition, it will require behavioral changes from consumers and producers in society. For example, there will have to be greater appreciation of environmental quality, a change in consumer attitudes, and an economic approach that goes beyond GDP and includes environmental and social values of development.
*Some proportions of this post have been derived from the World Bank Institute’s course on LED*

The Carbon Markets

As we draw ever closer to phasing out the Millennium Development Goals and replace them with Sustainable Development Goals in the Post 2015 Development period, there is little doubt that climate change will not be one of the main cross cutting themes. Here in Africa, climate change is a fairly new agenda and countries are facing a severe inadequacy of technical expertise and know how to initiate and scale up climate change governance interventions. Also, almost every other organization is coming up with various ways of “re-branding” its activities to fit into the “building resilience” realm – whose indicators are yet to be determined – in anticipation of funding for climate change governance strategies. 

It is also generally accepted that the level of funding needed to tackle the climate crisis is astronomical. For instance the most recent cost estimate for cutting deforestation in half ranges from USD 12 million to USD 35 billion per year (www.ucsusa.org/redd). Still, this figure is much more than is currently spent on protecting forests in the developing world and the question therefore is, where will the additional funding come from? Well, two main sources have been proposed: public funding and market finance. Public funding can come from several sources: dedicated funding that is additional to traditional overseas development assistance, the allocation of a portion of the revenue from cap-and-trade systems and/or through taxes and levies. Public funding can also come from international sources, or it can be raised internally within a country. 

Carbon finance on the other hand will come from carbon markets which are based on the premise that certain companies will be able to reduce their greenhouse gas emissions at a lower cost than others. If those companies are able to sell excess emissions reductions to other companies, the overall cost of compliance with the system will be lowered. Let’s see through an example of how a carbon market works. For this example, we have two companies representing the industrial sector as a whole, and we have a policy goal of reducing emissions by 2000 tons each.

Power Pro Ltd. uses old, inefficient power sources. It can make some easy updates to reduce its greenhouse gas emissions at a cost of USD 2 per ton. Power Pro is watching the carbon market, which is currently trading carbon credits at USD 4 per ton. At that price, Power Pro realizes it can reduce more emissions than required and sell its extra reductions at a profit. Power Pro therefore reduces 1000 tons more than required. At a cost of USD 2 per ton, reducing 1000 extra tons costs the company USD 2000. Credits are currently trading at USD 4 per ton so Power Pro should have no problem selling the extra 1000 tons at a profit in the carbon markets.    

For the second company, Newfangled Power, it is more costly to reduce emissions. It costs them USD 6 per ton to reduce emissions. For Newfangled Power to meet its requirement and reduce its emissions by 2000 tons, it would cost USD 12000. At that price, Newfangled Power realizes that buying credits from the carbon market would be cheaper than reducing their emissions because carbon credits are selling for USD 4 per ton. Buying 2000 tons of credits would cost them USD 8000.
Power Pro therefore reduced its emissions by 3000 tons, 1000 more than their goal. The cost to reduce those extra tons was USD 2000. They put their extra tons on the market at a price of USD 4000. Newfangled Power would like to buy credits to meet its goal of 2000 tons of reductions. Due to government rules, they can omly buy 50% of their necessary reductions on the market (and have to reduce the other 50% on their own). Therefore, they reduce 1000 tons of emissions themselves at a cost of USD 6000. They buy the other necessary 1000 tons at aprice of USD 4000. This transaction resulted in a USD 2000 profit for Power Pro and a USD 2000 savings for Newfangled Power, and 4000 tons of emissions were reduced, meeting everyone’s goals. Through the carbon markets, society achieves the needed emissions reductions at a lower overall cost. 

How governments administer carbon markets
Carbon markets result from policies that create “cap-and-trade” systems. A cap-and-trade system example follows. The first part of the system is the cap. Governments place a limit, or a cap, on the total amount of greenhouse gases that can be emitted each year. The amount of greenhouse gas emissions allowed generally declines in each subsequent year. Governments then print allowances allowances in the amount of the cap each year. Each allowance allows a company to emit one ton carbon dioxide equivalent (co2e) that year. They then generally give some allowances to companies for free as a cost saving measure. Finally, the rest of the allowances are auctioned off. The revenue generated from the auction of allowances can be used to fund other efforts to mitigate or adapt to climate change.

Then there is the trading part of the system. This part operates just like the carbon market described in the previous example. Companies choose the most cost-effective way to meet their emission reduction requirements. Generally, they will reduce their emissions upto the point where it becomes more cost-effective to buy allowances from others rather than make further reductions. They then buy allowances from another company that was able to reduce their emissions below their requirement. The price of allowances is determined by the supply and demand in the market. 

It is important to note that in many cases, some sectors such forestry are not usually included in the emissions cap. This means that any reductions in emissions from such sectors are treated like an offset. An offset is a certified emission reduction that takes place outside of the regulated sector(s), for instance capture and combustion of methane from landfills, and agricultural manure management. Activities that measurably reduce emissions from any sector not covered by the cap could be eligible to sell offset credits. Firm regulated by a cap-and-trade system are sometimes allowed to submit offsets to cover their emissions in lieu of the allowances that make up the cap.
*A major proportion of this post is taken from the Nature Conservancy’s Reducing Emission from Deforestation and Forest Degradation and Enhancing Forest Carbon Stocks Course*