Overcoming Political Climate-Change Apathy in the Era of #FridaysForFuture

The non-result of the 2019 UN Climate Change Conference(COP25) confirmed that consensual political will for implementing the Paris Agreement is still lacking despite strident protests by civil society actors, such as #FridaysForFuture. Breaking this deadlock requires not only reconsidering global climate-governance architectures but also a more pronounced stance of researchers at the science-policy-society interface

De-risking investment into concentrated solar power in North Africa: Impacts on the costs of electricity generation

A low-carbon energy transition on the basis of renewable energy sources (RES) is of crucial importance to solve the interlinked global challenges of climate change and energy security. However, large-scale deployment of RES requires substantial investments, including the participation of private capital. Scientific evidence shows that the economic feasibility of a RES project hinges on the availability of affordable project financing, which itself depends on risk perceptions by private investors. Since financing costs tend to be particularly high for capital-intensive RES projects and in developing countries, we investigate the impacts of addressing these perceived risks on electricity prices from semi-dispatchable concentrated solar power (CSP) in four North African countries. By employing a levelized cost of electricity (LCOE) model we find that comprehensively de-risking CSP investments leads to a 39% reduction in the mean LCOE from CSP. However, this reduction is still not sufficient to achieve economic competitiveness of CSP with highly subsidized conventional electricity from fossil fuels in North Africa. Hence, our results suggest that de-risking reflects an important strategy to foster the deployment of CSP in North Africa but additional measures to support RES, such as reconsidering fossil fuel subsidies, will be needed

Applying Recent Insights From Climate Risk Management to Operationalize the Loss and Damage Mechanism

With the impacts of climate change already being felt across the globe, it is imperative to manage and avoid further irreversible loss and intolerable damage. Adaptive learning, linked to climate risk management (CRM) and building on principled socio-economic analysis, can help overcome substantial scientific and political challenges, and provide operational support for debate around the Warsaw International Mechanism (WIM) for Loss and Damage (L&D)

Governance of Risks in Financing Concentrated Solar Power Investments in North Africa

A low-carbon energy transition on the basis of renewable energy sources (RES) is of crucial importance to solve the interlinked global challenges of climate change and energy security. To transform the global energy system, substantial investments will be needed and private participation will very likely be required to achieve the scale of new investment. Yet, especially developing countries are struggling to foster private RES investments. The literature argues that the economic feasibility and hence the realization of a RES investment project hinges on the availability of affordable project financing, which itself depends on perceived risks by investors. Since financing costs are found to be particularly high for capital-intensive RES projects and in developing countries, we investigate the impacts of a financial de-risking approach on electricity prices from concentrated solar power (CSP) in four North African countries and derive the following three conclusions. (1) By employing a levelized cost of electricity (LCOE) model we find that a comprehensive de-risking approach leads to a 32% reduction in the regional mean of LCOE from CSP. (2) To capture potential macroeconomic feedback effects of a de-risking strategy to CSP investments, we employ a Computable General Equilibrium (CGE) model. By considering a 5% CSP target by 2020, the model results indicate that an ambitious de-risking strategy is still not sufficient to achieve cost competitiveness between CSP and subsidized conventional electricity but has the potential to reduce the required subsidy to stimulate CSP deployment in 2020 by 0.03 USD/kWh which would increase GDP on average by 0.15% or 327 million USD. (3) By conducting expert interviews with RES investors we learn that investors are aware of different investment risks associated with RES projects in North Africa and of private risk transfer measures to mitigate these risks. Our results suggest that given the potential for substantial electricity cost reductions and overall economic benefits, financial de-risking - incorporating both public and private measures - reflects an important strategy to foster the deployment of RES

Mainstreaming of climate extreme risk into fiscal and budgetary planning: application of stochastic debt and disaster fund analysis in Austria

While ageing-related costs are perceived as the major drivers of fiscal pressure in the EU, concerns over climate-related public expenditures have received comparatively little attention in securing the EU’s long-term fiscal sustainability. Using the Shared Socioeconomic Pathways (SSPs) scenarios as bridging concept for linking the assessment of public cost of demography- and climate-related expenditures, this study proposes a climate risk mainstreaming methodology. We apply a stochastic debt model and assess the potential flood risk in Austria to the public debt and the national disaster fund. Our results indicate that public debt under no fiscal consolidation is estimated to increase from the current level of 84.5% relative to GDP in 2015 to 92.1% in 2030, with macroeconomic variability adding further risk to the country’s baseline public debt trajectory. The study finds that the estimated public contingent liability due to expected flood risk is small relative to the size of economy. The existing earmarked disaster risk reduction (DRR) funding will likely reduce the risk of frequent-and-low impact floods, yet the current budgetary arrangement may be insufficient to deal with rising risk of extreme floods in the future. This prompts the need for further discussions regarding potential reforms of the disaster fund. As many EU member states are in the early stages of designing climate change policy strategies, the proposed method can support the mainstreaming of climate-related concerns into longer-term fiscal and budgetary planning

A methodological framework to operationalize Climate Risk Management: Managing sovereign climate-related extreme event risk in Austria

Despite considerable uncertainties regarding the exact contribution of anthropogenic climate change to disaster risk, rising losses from extreme events have highlighted the need to comprehensively address climate-related risk. This requires linking climate adaptation to disaster risk management (DRM), leading to what has been broadly referred to as climate risk management (CRM). While this concept has received attention in debate, important gaps remain in terms of operationalizing it with applicable methods and tools for specific risks and decision-contexts. By developing and applying a methodological approach to CRM in the decision context of sovereign risk (flooding) in Austria we test the usefulness of CRM, and based on these insights, inform applications in other decision contexts. Our methodological approach builds on multiple lines of evidence and methods. These comprise of a broad stakeholder engagement process, empirical analysis of public budgets, and risk-focused economic modelling. We find that a CRM framework is able to inform instrumental as well as reflexive and participatory debate in practice. Due to the complex interaction of social-ecological systems with climate risks, and taking into account the likelihood of future contingent climate-related fiscal liabilities increasing substantially as a result of socioeconomic developments and climate change, we identify the need for advanced learning processes and iterative updates of CRM management plans. We suggest that strategies comprising a portfolio of policy measures to reduce and manage climate-related risks are particularly effective if they tailor individual instruments to the specific requirements of different risk layers. (authors' abstract

Modeling for insights not numbers: The long-term low-carbon transformation

Limiting global warming to prevent dangerous climate change requires drastically reducing global greenhouse gases emissions and a transformation towards a low-carbon society. Existing energy- and climate-economic modeling approaches that are informing policy and decision makers in shaping the future net-zero emissions society are increasingly seen with skepticism regarding their ability to forecast the long-term evolution of highly complex, nonlinear social-ecological systems. We present a structured review of state-of-the-art modeling approaches, focusing on their ability and limitations to develop and assess pathways towards a low-carbon society. We find that existing methodological approaches have some fundamental deficiencies that limit their potential to understand the subtleties of long-term low-carbon transformation processes. We suggest that a useful methodological framework has to move beyond current state of the art techniques and has to simultaneously fulfill the following requirements: (1) representation of an inherent dynamic analysis, describing and investigating explicitly the path between different states of system variables, (2) specification of details in the energy cascade, in particular the central role of functionalities and services that are provided by the interaction of energy flows and corresponding stock variables, (3) reliance on a clear distinction between structures of the sociotechnical energy system and socioeconomic mechanisms to develop it and (4) ability to evaluate pathways along societal criteria. To that end we propose the development of a versatile multi-purpose integrated modeling framework, building on the specific strengths of the various modeling approaches available while at the same time omitting their weaknesses. This paper identifies respective strengths and weaknesses to guide such development