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Professor Ottmar Edenhofer, deputy director and chief economist at the Potsdam Institute for Climate Impact Research in Germany.
Heinrich-Böll-Stiftung/Flickr
INTERVIEWS
17 July 2015 14:30

The Carbon Brief Interview: Prof Ottmar Edenhofer

Leo Hickman

Leo Hickman

07.17.15
Leo Hickman

Leo Hickman

17.07.2015 | 2:30pm
InterviewsThe Carbon Brief Interview: Prof Ottmar Edenhofer

Ottmar Edenhofer is deputy director and chief economist at the Potsdam Institute for Climate Impact Research in Germany. In 2008, he was appointed the co-chair of working group III (WG3) of the Intergovernmental Panel on Climate Change (IPCC), which focused on the “mitigation of climate change”. In 2012, he was appointed director of the Mercator Research Institute on Global Commons and Climate Change.

Edenhofer on what next for the IPCC: “[It]needs a strong interaction, a strong cooperation between working group II and III, this is from my point of view the most important thing…We need a kind of [special] report which allows us to evaluate the short-term entry points in the effect of climate policy.”

On renewables vs coal: “We have also seen that renewables have contributed to the reduction of emissions. But all this progress has been overcompensated by coal, and by the carbonisation, not just in China and India, but also in fast-growing Asian countries.”

On Africa: “The increase of emissions in Africa is basically driven by oil and gas, but now coal becomes more and more important. Africa could become the future China.”

On carbon pricing: “We are not obsessed by carbon pricing. We have done an analysis and we have shown that the low relative price of coal was the incredibly important main driver of the carbonisation pathway in the world. This is an empirical fact.”

On the Paris climate: “I do not see a single price signal from Paris. But we could start, so to say, instead to defining pledges or allowing pledges in terms of policy packages, and also then to combine this with the Green Climate Fund, where people get rewarded for increasing their ambition level.”

On the equitable use of coal: “We should not say that Africa is not allowed to use any coal. They can use coal to a certain extent, but then other countries, in particular, the Annex-I countries have to use less coal.”

On limiting temperature rise to 1.5C: “[It] is incredibly challenging…We have to think about the requirements. On the negative emissions side, the requirements are really very challenging and very demanding.”

On negative emissions technologies, such as BECCS: “We should not say it’s totally implausible. But what does it mean, or what does it imply, is that we need land-use management techniques and land management tools, and we haven’t thought about this.”

On whether we need the UNFCCC: “I would be, from my point of view, not wise to abolish the UNFCCC, but it would be also, on the other hand, overly optimistic to rely exclusively on the UN process.”

On the papal encyclical: “I am not in agreement with the encyclical when the encyclical says that in some parts of the world degrowth might be a option for climate policy.”

On climate sceptics: “We might have a rational debate, and I hope we can facilitate this debate. As long as these people want to listen, and these people also want to have a dialogue, instead of just trying to fight for the vested interests.”

On talking about climate change with his children: “My daughter understands very well that if you try to change the system in such an unprecedented scale, you have to take into account some unknown things. And she is concerned about this, but she has no strong interest in the underlying scientific debate. My son has a strong interest in that, and he understands this very well.”

On whether humanity can succeed in tackling climate change: “I hate to say now we are in a wonderful world of renewables. This is not the case. But for me human history is not a tragedy, we are not doomed to fail. It is a drama. We have to take the right decisions, and I would like to discuss the options we have now.”

CB: The IPCC has decided to continue producing assessment reports, on a 5-7 year cycle. Would you have preferred to see smaller, more frequent reports on specific regions, as some have suggested? Or are you happy with the status quo continuing?

OE: First of all, I would like to highlight that in October I will no longer be co-chair of WG3, so, in that sense, I’m not responsible for carrying out these reports. Basically, I see two challenges for the IPCC. The first one is what we need is in the sixth assessment cycle is a better understanding of differential impacts. So, what are the impacts of climate change between 1.5-2.5C? That’s very important because the IPCC report now is very inconclusive about these differential impacts. But it is important to understand because otherwise we have no clear understanding why exactly we should rely [on], or we should stick to the 2C target. So something like this: we need the differential impacts and, in particular, we want to understand what will happen between 1.5 and 2 because this is an unresolved issue. And this has to be combined with the differential mitigation costs and risks so we are in good shape, but these two perspective have to [be brought] together. Therefore, the IPCC needs a strong interaction, a strong cooperation between working group II and III, this is from my point of view the most important thing. And also to provide scenarios which are consistent for an assessment between working groups II and III. So, in that sense, this is something which is quite important.

The second aspect is that I am not so much concerned about special reports in specific regions. What we need is a kind of report which allows us to evaluate the short-term entry points in the effect of climate policy. So this sounds a little bit academic, but why is this so important? And I would like to describe what I mean. In a recently published paper in the PNAS[Proceedings of the National Academy of Sciences of the United States of America], we have shown that we are in the middle of a coal renaissance. Which basically means that we see, in particular, in the non-annex 1 countries that the share of coal on the primary energy is on the worst-case business-as-usual scenario. So we are far away from a departure of the business-as-usual scenario. Why is this the case? It is the case because of the fact that coal is cheap relative to gas and oil, but also relative to the renewables. We have seen a remarkable progress in the renewables sector. We have also seen that renewables have contributed to the reduction of emissions. But all this progress has been overcompensated by coal, and by the carbonisation, not just in China and India, but also in fast-growing Asian countries.

The second important insight is that we see a renaissance of coal in Africa. Incredible, large-scale coal renaissance, in particular, in countries which are economically successful. So, up to now, the increase of emissions in Africa is basically driven by oil and gas, but now coal becomes more and more important. Africa could become the future China. So up to now, so we do not see, or we do not count Africa as a main emitter, but it could be the case in 10 or 20 years when they have built up the whole infrastructure. And Africa is now at a bifurcation point. So what does this mean for a short-term entry point? It does mean that exactly in a time where people in Africa, decisionmakers, decide at what path that they should go, so we need a strong [market] signal. And we need a policy which makes low-carbon technologies much more competitive compared to coal.

So how can this be implemented? The most important thing, it seems to me, is carbon pricing. Why is carbon pricing so important? Many non-economists challenge always economists and say: why are you so obsessed by carbon pricing? We are not obsessed by carbon pricing. We have done an analysis and we have shown that the low relative price of coal was the incredibly important main driver of the carbonisation pathway in the world. This is an empirical fact. We should not just talk about models. We should not just talk about obsessive thinking, we should just think about the underlying facts. And the underlying facts show exactly this. So we need a short-term entry point. Everybody in the field knows that it is incredibly complicated to implement a carbon price in countries. Why? Carbon pricing removes rents from the owners of coal, oil and gas. Carbon pricing can have a diverse distribution of impacts that you might create a lot of resistance from vested interests, from the owners of coal, oil and gas, which are normally quite powerful groups in a country. So what we have to do is we have to convince people that a short-term entry point, carbon pricing, can create revenues. The revenues could be used, at least partially, to invest in sanitation, to invest in clean water, to invest in telecommunication infrastructure, which improves the competitiveness of those countries. That is from my point of view quite important in a [IPCC] special report, highlighting these short-term entry points, and also the options, real-world decision makers like finance ministers have is, from my point of view, a very important thing. To be honest, I have doubts that the IPCC can carry out such a special report, but it seems to me that this is something which is incredibly important when the IPCC should remain relevant for the decision-makers. From my point of view, this is much more important than to have, again, just a deeper report about technologies. We should continue, we should up their technology, but this is something which we have done already in the fifth assessment report, but already we realise that institution matters, taxes matters, pricing system matters, emissions trading matters, and we have to understand what worked in the past, what didn’t work in the past, what was the reason for that, and what kind of short-term entry points into climate policy the decision-makers have at hand.

CB: We’re 5-6 months away from the Paris COP. How can the outcome of that deliver that market signal? You’ve talked about carbon pricing. What specifically has to be in the deal to send that message, or to set out that framework?

OE: From my point of view, what we will probably see in Paris are pledges. And these pledges will be pledges which can be characterised as emission reduction compared to baselines. And then people will try to make the pledges comparable. That’s good. But at the same time, we need a little bit more pledges, first of all, on policy packages, on whole policy packages, which are quite concrete, and in addition to that, we have to combine the Green Climate Fund in a way which increases cooperation, because when people say, ‘we want to have a carbon price, we will implement a carbon price if others countries will do, and we might then use then the Green Climate Fund to use the transfers to increase cooperation’, this could be a way forward. This will not be negotiated in Paris, but along these lines, from my point of view, this is the way forward after Paris, so that we have platforms where countries can compare their national policies, but also at the same time, we need a way where we increase over time the ambition level. And it seems to me that in cases where countries have policy packages, not instead of, but as a complement to emission reductions, so that could be a way forward, a first step, so that countries have to think more carefully – so what does it mean, for example, to reduce emissions? Do you want to do it with the carbon prices? What are the obstacles? What are the challenges? So this is something that could be very healthy, so for all of these policy packages, countries have to take into account the risks and the opportunities. And this something which has to be done. So I do not see a single price signal from Paris. But we could start, so to say, instead to defining pledges or allowing pledges in terms of policy packages, and also then to combine this with the Green Climate Fund, where people get rewarded for increasing their ambition level.


CB: You mentioned coal for Africa. How do you deal with the challenge of enabling a country to lift out of poverty and develop, without this kind of, as you suggest, this move towards coal? How to we interrupt that process without interrupting development?

OE: That’s a very good question. So definitely we should not say that Africa is not allowed to use any coal. They can use coal to a certain extent, but then other countries, in particular, the Annex-I countries have to use less coal. And this is something which has to be reflected in a kind of a price signal. And it seems to me that when Africa is planning now, their cities, they have to take into account that the carbon price in the future will have, let’s say, 50 euros per tonne of CO2. So what will not work is that Africa will build up a carbon-intensive infrastructure – cities, roads, power-plants – and then in ten years or 20 years from now they will be asked by the negotiators please reduce their emissions. So this is now the time and it’s a gradual process, and carbon pricing allows for such gradual planning when you have such credible signals. And, again, I would like to highlight the fact that for Africa it could be incredibly important and incredibly useful to have these revenues because the states are weak, they don’t have many revenues, and taxing ‘bad’ is much better that taxing ‘goods’. and with taxing ‘bads’ they could also finance a lot of sustainable development goals, like universal access to clean water, to clean electricity, to sanitation, to telecommunication. This is something which is incredibly powerful narrative, and it would show, in particular Africa, that they can benefit from the long term to use a little bit of coal, but pricing CO2, use that money for a carbon-free, or at least a low-carbon infrastructure.

CB: Have the chances for limiting temperature rise to 1.5C now gone? Is it really feasible or pragmatic or achievable now?

OE: The 1.5C target is incredibly challenging. So we have identified the underlying requirements. So the first one is so that we almost half the emittable budget from 1000 down to 500 gigatonnes, which is enormous. You need much more negative emissions. So much more carbon dioxide removal technologies, for instance. It’s not, I would say, for me feasibility and non-feasibility is not the right wording. The right wording is what are the requirements. And we have to think about the requirements. On the negative emissions side, the requirements are really very challenging and very demanding. However, let me highlight the following fact. So, what we need is, in any case, for a 2C target, for a 1.5C target, we need in any case a fundamental departure from the business-as-usual scenario. And it seems to be that this is something which should be discussed now. For me the whole debate on 1.5 and 2C is misleading, because we have now an international focal point, it’s roughly the 2C target. It shows that even for 2.5C we need always a fundamental departure from the business-as-usual, and we can discuss now what can we do to find that effective entry point. And so far we haven’t found this entry point, because we are now on a carbonisation pathway. So I would like to iterate this again and again how important this is: that we are not moving in the right direction. We see some signs: the enormous technological progress in PV. There’s no doubt about this. But we see also the technological progress in the exploration of fossil fuels around the globe, right. So technological progress does not just benefit renewables, it benefits also the fossil fuel sector. And this is something which, from my point of view, is important in a carbon prices. From my point of view, there are three aspects or three tasks. It penalises, on the one hand, in particular, the use of coal. It penalises the fossil fuels. It incentivises the low-carbon alternatives. And, third, it generates revenues. And, third, if you have a carbon price, the carbon price can and should be complemented by R&D, by technology policy. There is no doubt about this. But when you have no carbon price, technology policy goes in the wrong direction. So let’s assume you have no carbon price, you subsidise the nuclear power, all the renewables sector. What does this mean? You increase the share of renewables, but at the same time you have less demand on the fossil fuel market, and this lower demand on the fossil fuel market again helps to make coal cheaper compared to gas and compared to oil, and incentivises additional coal use. So technology policy alone will not help. So it has to be complemented with a carbon price, and, in that sense, I would say in combination, that could be a very powerful tool.

CB: In WG3, it’s shown that the scenarios to keep the world below 2C rely heavily on, as you say, negative emissions or BECCS [bioenergy and carbon capture and storage], and overshoot scenarios and returning, etc, later in the century. Is that risky? Are those scenarios politically or socially plausible given the land-use implications, etc?

OE: First of all, I would say the assessment and evaluation of the plausibility of the requirements needs more work, right. But on the other hand, if you look at the technical potential of the different negative emission options, like BECCS, in combination with CCS, like aforestation, like charcoal, biochar and so on, this is something which has, probably, enormous potential, and we have a lot of degraded land around the globe. So we should not say it’s totally implausible. But what does it mean, or what does it imply, is that we need land-use management techniques and land management tools, and we haven’t thought about this. Again, from my point of view, to say this is socially and politically feasible, means that we have to think about taxation on land, dealing with the land-use based emissions, so it’s an issue not just about the decarbonisation of the power sector, it needs land-use management, which we have to work on, and the sixth assessment report has to work very hard. But, on the other hand, I would say there’s huge technical potential here, and we need further evaluation of the economic and the institutional plausibility. It’s not just a technological issue.

But on the other hand, I would like to highlight: mitigation is always risky, right. So there is no riskless option here. But there’s a huge difference with the risk of the impact-side. Because the amount of carbon which we will release in the atmosphere in the next two decades determine the increase of the global mean temperature in an irreversible way. So this cannot be reverted, at all. And is something where just to release the CO2 in the atmosphere, this is an inherently irreversible process. It might be the case that in the second half of the century, when nature plays out its card, the impacts might be a little bit lower, it might be a little bit higher, but humankind has then no longer an another option than adaptation or solar radiation management. So, in that sense, in the next few decades, there is a window of opportunity to implement mitigation and emission-reduction policies. And here we have to take into account the risks. But all those risks are there, but they are not irreversible. So when we learn more, when we have a learning by doing process, we cannot just, we can revert. But now we need a discussion about how to deal with the negative emissions in a much more pragmatic way. I am a little bit worried that we have too much talk where people say it’s implausible, others people say it’s plausible. Let’s go to in the technical details, and let’s not talk too much about the technological potential because the technological potential is probably there, but let’s think a little bit about the institutional implementation of these options.

CB: This year has seen some pretty remarkable events outside of the UN process. We’ve had the papal encyclical, which we can talk about more in detail in a moment. We’ve got the divestment movement, which is gaining traction, it seems. We’ve even got hints and suggestions from the IEA, BP and others that emissions may be decoupling, or have in the last 12 months or so, been decoupling from economic growth…

OE: And the US-China deal…

CB: The US-China deal. We’ve got some interesting, possibly, you’ve said some pessimistic things, but maybe some optimism. Do we still need the UN international process? Could we as a species tackle climate change without this UN process?

OE: I would say the UN process has one major advantage. And the major advantage is it allows, produces, facilitates legitimacy. It’s not efficient at all. But it creates legitimacy. And this is a huge asset to have processes and bodies which are able to create legitimacy. But you can see here now that there are a lot of things which are outside the UNFCCC process, but not in order to substitute the process, but to complement the process. The US-China deal was nothing which has been negotiated in the UN. But, nevertheless, it will shape the negotiations. So when people start to implement climate policies and share this, and start, for example, with carbon-pricing schemes. This can also be very effective. But it can be embedded, then, in the UN process and create a lot of legitimacy. I would be, from my point of view, not wise to abolish the UNFCCC, but it would be also, on the other hand, overly optimistic to rely exclusively on the UN process. We need lots of initiatives outside the UNFCCC process.


CB: Moving on the papal encyclical, which you had an advisory role in. You’ve talked about carbon-pricing already. But the encyclical expressed concerns, and the wording around it was very interesting around the role of capitalism, around carbon markets and credits, and so on. Can you explain a little bit more about your own role and how your own views kind of settle within the encyclical’s conclusions?

OE: Well, first of all, the encyclical has two components. One component, in one instance, it says very clearly that market processes are only just and fair when all social costs are taken into account. So, basically, this is a justification of the polluter pays principle. So this is, from my point of view, the first and most important principle the encyclical endorses. However, the encyclical is quite sceptical about the CDM [ Clean Development Mechanism], and also about the carbon market. And it’s true that in some instance the CDM was not effective. And it is also true that the EU ETS system has some inherent problems. So this has to be fixed. I would say, I’d take this as a kind of a dialogue that Pope Francis wants with the experts, to work on this to what extent can we make the EU ETS, for example, effective, just and fair. But, by and large, it has to be highlighted that the Pope does not claim any authority in this kind of technical issues, or when ethical principles are applied to concrete and specific problems. So I take this as a kind of a dialogue with environmental economists. And we as environmental economists, we should not say: the Pope is not an economist. But we should say: the concern is a serious concern, it’s a concern which has to be taken into account and let’s facilitate the discussion. And many environmental economists, by the way, have their concern also to what extent the EU ETS, in particular, and the ETS, in general, is the right way to do. On the other hand, I have to say, one of the writers might not be totally aware about the whole functioning of an EU ETS, because it is a cap, the cap has been delivered, the price signal is not appropriate, it will not launch the kind of innovation [we need]. But it seems to me that the pope is much more concerned that people tried to implement some kind of solutions which in the end make some people rich, but does not solve the problem, so to say. It seems to me that that’s the main concern.

CB: Moving on to another, related subject. Do you think climate scientists, or scientists in general, can and should be advocates for policy or solutions. Obviously, the IPCC is famously policy neutral and it treads a very careful path there. But some people might say that your role in the encyclical could be portrayed or framed as an act of advocacy by a scientist. How do you respond to that?

OE: That’s very easy for me because the author of the encyclical is the Pope, full stop. And if you read the encyclical carefully it’s his language and it’s his perspective. So the fact that I was several times at the Vatican and can provide insights from the IPCC is something which has absolutely nothing to do with an advocate role. And if you read the encyclical carefully, you will that there are many areas where obviously there’s a disagreement with positions I have expressed on several occasions. So, on carbon pricing, I’m also a little bit more optimistic than the encyclical about the EU emissions trading scheme. Nevertheless, I have proposed some ways how to fix that problem, and, in particular, I am not in agreement with the encyclical when the encyclical says that in some parts of the world degrowth might be a option for climate policy. I have explained this several times. So, in that sense, I feel very safe that I gave advice, and also I’m, for example, in full agreement with two other important, the most important highlights in the encyclical. And the first one is that the encyclical sees climate change, poverty reduction and inequality as the most fundamental moral, ethical challenge in the 21st century. And I believe that’s true. We have to deal with that. This is a value judgement, but within this value judgement as a scientist I can provide options, can explore options, can inform people what are promising pathways. And the second highlight in the encyclical is the statement that the atmosphere, the oceans, partially also the global water cycle, are global commons. And this is a fundamental insight, so to say, and this brings the ethical and the moral dimension into the picture and into the whole debate. And this is something which I very much appreciate what Pope Francis did. This is very much consistent with my own value systems. But I was always quite open with my values systems, I put them on the table and said, within the IPCC and also in my writings that when I proposed or discussed some policy instruments I always made very clear under what conditions and what are my evaluation criteria. And most of the time in my writings I have evaluated policy instruments from different perspectives, from within a multiple universe of value systems. So, in that sense, I’m not an advocate at all. And let me highlight that the encyclical hasn’t been written by political or scientific ghostwriters. The pope listens, or has listened to science, but then, in the end, he has written his own encyclical.

CB: The IPCC has been much attacked and is much-hated institution amongst climate sceptics. How have you, and how do you respond to this group of the population?

OE: From my point of view, I have real problems with this notion of climate sceptics, because, as a scientist, you have to be always sceptical, right? There is no science without scepticism, so that’s good to evaluate again and again things, and challenge things and raise questions. But it seems to me that the climate sceptic is not a homogenous group. So there’s one group of climate sceptics who argue that, they challenge the main influence of the burning of fossil fuels and that deforestation has increased the global mean temperature. I would say this is scientifically and not very valid to challenge this. So WG1 has carried out almost a two decade process, and we are quite sure about this. So this group of climate sceptics is, from my point of view, almost hostile to science.

The there’s another group where arguing that, OK, we might increase the global mean temperature by burning fossil fuels and deforestation, and the increasing mean temperature might have impacts, but the impacts are not so severe as some people might anticipate. And I would say this group of climate sceptics is a group which is challenging, but there is a lot of uncertainty around the climate impacts. The crucial question is: is this uncertainty around the impacts a reason for acting, or a reason for waiting? And, from my point of view, it is a reason for acting because, what I’ve just said is the cumulative amount of emissions which we are releasing in the atmosphere determines in an irreversible way. So it might be the case that the climate impacts are lower, less severe than some people anticipate, or the other way around. But, nevertheless, we have then no longer option to deal with that. And there are lot of climate sceptics who argue that mitigation is too risky, we cannot do it. Again, this is another group of climate sceptics, and we have to deal with another type of uncertainty. So my feeling is that with these two second groups we might have a rational debate, and I hope we can facilitate this debate. As long as these people want to listen, and these people also want to have a dialogue, instead of just trying to fight for the vested interests. As long as scepticism should help and will help to agree on scientific facts and to achieve, so to say, truth, in this old European sense, that is fine. If it’s part of a scientific debate. But if these arguments are just used to protect private interests then, from my point of view, this is something which cannot be dealt with in a scientific dialogue. But in general if people say we have a lot of uncertainty around the climate impacts, and mitigation has its own risks, I am always willing to have a debate with these kind of people. Hopefully, a respectful debate. And a debate which has a focus on science and not just on vested interests.

CB: How do you talk to children about climate change?

OE: [Long pause]. That’s very interesting. So my son is very well informed about the scientific and the economic facts. He likes to debate that with me all the time. My daughter has much more interest in art and..

CB: How old?

OE: My son is 16 and my daughter is 13. So this is an interesting mixture. My daughter understands very well that if you try to change the system in such an unprecedented scale, you have to take into account some unknown things. And she is concerned about this, but she has no strong interest in the underlying scientific debate. My son has a strong interest in that, and he understands this very well. Yes, this is what I am doing, but admittedly when my kids were, let’s say, five or ten years they had no interest, and I thought it is not worthwhile and not appropriate for me to manipulate…

CB: Do you talk about, or do they raise it themselves, the sense of intergenerational justice about climate change? They will be the generation that will have to do the heavy lifting…

OE: Yes, that’s right. And it seems for them inappropriate. And when I told my daughter, so she asked me so: what do you think about the poverty? And I said: “yes, we could raise money to protect the climate and to help the poor people with clean water, clean water in particular.” She immediately understands and said, “Oh, that’s a good plan. Let’s implement that plan.”

CB: So you’ve expressed pessimism a bit, a little bit of optimism, and we’ve talked about how you speak to children. Overall, how do you feel today, generally going forward? Are we going to see off the threat of climate change in this century or not?

OE: Look, from my point of view, optimism and pessimism is not the right way. I do not like wishful thinking. So I try to explain very carefully, and this is the reason why I have carried out this paper with my colleagues on the coal renaissance. So I hate to say now we are in a wonderful world of renewables. This is not the case. But for me human history is not a tragedy, we are not doomed to fail. It is a drama. We have to take the right decisions, and I would like to discuss the options we have now. And we have options: it’s not the case that we are indeed doomed to fail. We have now a choice. We can do this. And we can learn. We might make mistakes. In a sense, I have a dramatic understanding, so to say of human history. And this is something which motivates me: not to say, “Oh, let’s be optimistic. Climate change is a wonderful opportunity to do other good things.” No, it’s a huge challenge. It requires a fundamental transformation of our institutions and so on. But I also would like to say that this kind of transformation is something with which we can solve other problems at the same time. I try to be realistic what is going on, I like to look at the data, but at the same time I want to be precise what kind of decisions are possible.

CB: OK, thank you very much.

OE: Good. Thank you.

Main image: Professor Ottmar Edenhofer, deputy director and chief economist at the Potsdam Institute for Climate Impact Research in Germany.

The interview was conducted by Leo Hickman on 9 July 2015 at the Our Common Future conference held at the UNESCO building in Paris.

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