Carbon pricing and Just Transition tops agenda at CPL Inaugural Summer Climate Academy
By Mieke van der Wansem and Jenna Clark
Designing market mechanisms to deploy financial tools like carbon taxes, energy subsidies, or cap and trade mechanisms is among the top challenges facing developing countries as they seek to promote carbon mitigation, delegates to The Climate Policy Lab Climate Policy Summer Academy concluded during meetings of the Academy’s inaugural session this past June. A just and equitable transition was also top of mind, as delegates discussed how to address institutional barriers in their home countries and to build capacity in clean technology development and deployment. The Climate Policy Lab (CPL) inaugural Climate Policy Summer Academy (CPSA) hosted 39 participants in June from nine developing countries - India, Indonesia, Mexico, Brazil, Colombia, South Africa, Ethiopia, Vietnam, Sierra Leone- as well as from several pan-African organizations and United Nation’s agencies. Attendees included senior climate government leaders, representatives from non-governmental organizations, and academic researchers who support their governments on national climate policy analysis.
The Academy aims to facilitate successful knowledge exchange on achieving urgent climate action goals. Curriculum is designed to help participants enhance their understanding of current climate policy options and the technical and analytical tools needed to determine their country’s best plan of action to address climate change while advancing development needs and just transition. Through a combination of lectures, case studies, exercises, and group discussions, participants compared national climate modeling approaches and learned about the specific steps of CPL’s “Policy Gap Analysis” process, which helps governments identify whether existing policies are effective and what policy additions would best achieve more ambitious nationally determined contributions (NDCs). Over the course of the week of in-person discussions, delegates noted that data transparency that opened access to national emissions and energy use data to the widest number of analysts would be a key tool to improve policy formation.
CPL scholars presented modeling work on decarbonization pathways for India that highlights potential policy levers that can promote green industrialization. In doing so, CPL was able to share comparative data that showcases how China’s manufacturing-based strategy for solar energy outpaced India’s more deployment-oriented solar policy in terms of job creation and economic growth. China’s experience prioritizing clean tech manufacturing sector policies is often cited as a model for other developing world countries but at the same time underscores the challenge many developing nations face in trying to close the technology gap for clean energy deployment and innovation. In discussions, delegates talked about the difficulty some developing countries are facing trying to catch up to the developed world and China on clean energy innovation knowhow. Moreover, it was pointed out that mainstream technologies like wind and solar might be a less appropriate technology innovation pathway than other promising options such as waste-to-energy, pumped air/pumped hydro, and mini-hydro which could be a better fit in certain geographies.
Academic scholars from Mexico presented research that highlighted how fuel subsidies distort efforts to control greenhouse gas emissions in the transportation sector while other presentations emphasized the composition of national emissions inventories that demonstrate that many countries rely heavily on hydroelectric power and have less manufacturing, leaving policy makers with the challenging task to address emissions in harder to abate sectors like agriculture or heavy industry or to tackle often politically-sensitive, land use changes. New research also highlights the difficulties of scaling up land-based carbon removals quickly.
A big take away from the discussions at CPL’s Climate Policy Summer Academy was the need for more information and research on carbon pricing mechanisms. CPL shared its taxonomy of carbon finance and led discussions comparing efforts to price carbon in different national and sub-national contexts. Delegates from Africa noted that a carbon tax could wind up being more suitable for certain developing nations who might not have the experience and workforce capacity to establish trading platforms for cap-and-trade systems. The difficulties that Europe and California experienced in working out the bugs in their emissions trading systems gives pause to some policy makers from low-income countries, delegates noted. Many emerging market countries are working with their financial sectors to study and promote development of ETS systems, such as Indonesia is currently working on implementation details for its new Presidential Regulation Number 98/2021 on Carbon Pricing. Indonesia currently hosts a carbon trading schedule that operates under a voluntary mechanism, but Jakarta now plans to issue official government emissions permits and possibly establish an offsets market. Data collection for emissions remains a key aspect for all climate policy decision- making but is especially critical for a well-functioning ETS, delegates emphasized.
CPL plans to expand its Climate Policy Summer Academy in the coming years and offer specialized courses on carbon trading and pricing, in addition to its policy gap analysis approach. To learn more information about upcoming research and executive education, join our mailing list by clicking here. ∎
Mieke van der Wansem is Associate Director of Educational Programs at Climate Policy Lab at The Fletcher School, Tufts University.
Jenna Clark is Program Coordinator at Climate Policy Lab at The Fletcher School, Tufts University.