Executive Summary

Climate Change Mitigation in Developing Countries: Brazil, China, India, Mexico, South Africa, and Turkey

Greenhouse gas emissions from developing countries will likely surpass those from developed countries within the first half of this century, highlighting the need for developing country efforts to reduce the risk of climate change. While developing nations have been reluctant to accept binding emissions targets, asking that richer nations take action first, many are undertaking efforts that have significantly reduced the growth of their own greenhouse gas emissions. In most cases, climate mitigation is not the goal, but rather an outgrowth of efforts driven by economic, security, or local environmental concerns. This study attempts to document the climate mitigation resulting from such efforts in six key countriesBrazil, China, India, Mexico, South Africa, and Turkeyand to inform policy-making aimed at further mitigation in these and other developing nations.

The six countries examined here reflect significant regional, economic, demographic, and energy resource diversity. They include the worlds two most populous nations, a major oil exporter, Africas largest greenhouse gas emitter, and the country with the largest expanse of tropical forest. While their circumstances vary widely, these countries share common concerns that have motivated actions resulting in reduced greenhouse gas emissions growth. Primary among these concerns are economic growth, energy security, and improved air quality. The analysis presented here demonstrates that actions taken by these countries to achieve these and other goals have reduced the growth of their combined annual greenhouse gas emissions over the past three decades by nearly 300 million tons a year. If not for these actions, the annual emissions of these six countries would likely be about 18 percent higher than they are today. To put these figures in perspective, if all developed countries were to meet the emission targets set by the Kyoto Protocol, they would have to reduce their emissions by an estimated 392 million tons from where they are projected to be in 2010.1

The six case studies identify a broad range of mitigation activities and potentials:

Brazil's annual emissions are 91 million tons, or 10 percent lower than they would be if not for aggressive biofuels and energy efficiency programs aimed at reducing energy imports and diversifying energy supplies. A tax incentive for buyers of cars with low-powered engines, adopted to make transportation more affordable for the middle class, accounted for nearly 2 million tons of carbon abatement in the year 2000. If alcohol fuels, renewable electricity, cogeneration, and energy efficiency are encouraged in the future, carbon emissions growth could be further cut by an estimated 45 million tons a year by 2020. Deforestation, however, produces almost twice as much carbon dioxide as the energy sector. Government policy, with few exceptions, indirectly encourages emissions growth in the forestry sector.

China has dramatically reduced its emissions growth rate, now just half its economic growth rate, through slower population growth, energy efficiency improvements, fuel switching from coal to natural gas, and afforestation. Emissions growth has been reduced over the past three decades by an estimated 250 million tons of carbon per year, about one-third of China's current emissions. Continued policies for economic reform, efficiency, and environmental protection could reduce emissions growth by an additional 500 million tons a year in 2020.

India's growth in energy-related carbon dioxide emissions was reduced over the last decade through economic restructuring, enforcement of existing clean air laws by the nation's highest court, and renewable energy programs. In 2000, energy policy initiatives reduced carbon emissions by 18 million tons-over 5 percent of India's gross carbon emissions. About 120 million tons of additional carbon mitigation could be achieved over the next decade at a cost ranging from $0-15 per ton. Major opportunities include improved efficiency in both energy supply and demand, fuel switching from coal to gas, power transmission improvements, and afforestation.

Mexico was the first large oil-producing nation to ratify the Kyoto Protocol. Major factors affecting Mexican greenhouse gas emissions are population growth, economic development, energy supply growth, technological change, and land use change. Mexico has begun to reduce deforestation rates, switch to natural gas, and save energy, reducing annual emissions growth over the last decade by 5 percent, or 10 million tons of carbon per year. Mexican carbon dioxide emissions are projected to grow 69 percent by 2010, but alternative strategies could cut this growth by 45 percent.

South Africa's post-Apartheid government places its highest priority on development and meeting the needs of the poor. Over one-third of the nation's households are not even connected to a power grid. Yet, emissions growth could be reduced 3-4 percent a year by 2010 through efforts to reform the economy and improve energy efficiency. The government is already taking steps to phase out subsidies to its unusual, carbon-intensive coal liquefaction industry and to open the country to natural gas imports. As in many other developing countries, the absence of rigorous and publicly available studies of future energy use and greenhouse gas emissions remains an obstacle to future emissions mitigation.

Turkey's high rate of energy-related carbon emissions growth is expected to accelerate, with emissions climbing from 57 million tons in 2000 to almost 210 million tons in 2020. Carbon intensity in Turkey is higher than the western developed nation average. Energy-intensive, inefficient industries remain under government control with soft budget constraints, contributing to undisciplined energy use. Planned industrial privatizations may close the oldest and most inefficient operations and modernize surviving ones. Elimination of energy price subsidies could stimulate energy conservation, reducing energy and emissions growth below current projections.

Taken together, these six country studies support four broad conclusions:

• Many developing countries are already taking action that is significantly reducing their greenhouse gas emissions growth.
• These efforts are driven not by climate policy but by imperatives for development and poverty alleviation, local environmental protection, and energy security.
• Developing nations offer large opportunities for further emissions mitigation, but competing demands for resources may hamper progress.
• Developing countries can use policies to leverage human capacity, investment, and technology to capture large-scale mitigation opportunities, while simultaneously augmenting their development goals.

The six case studies also identified common barriers to climate mitigation. In many cases, the lack of good data impedes efforts to identify and realize mitigation potential. Insufficient human capacity-to analyze energy and emission futures, identify mitigation opportunities, execute economic reforms, and cultivate investment opportunities-represents another significant barrier. In most countries, public control of at least a portion of energy resources works against emissions mitigation by preventing the emergence of more efficient private actors.
Finally, a range of concerns-from the absence of transparency and rule of law to the extra risk associated with nontraditional energy investment-impedes investment and technology transfer that would contribute to emission mitigation.

The experiences of these six countries have implications for future policy at multiple levels-for national efforts within developing countries, for the evolving international climate framework, and for other bilateral or multilateral efforts aimed at encouraging emission reduction in developing countries.

One broad lesson, given the diversity of drivers and co-benefits, is the need at both the national and international levels for flexible policy approaches promoting and crediting a broad range of emission reduction and sequestration activities. Other policy priorities include: continuing to promote market reforms, such as more realistic energy pricing, that can accelerate economic growth while reducing emissions growth; working within developing countries and through bilateral and multilateral efforts to improve investment environments and create stronger incentives for climate-friendly investments; targeting capacity-building assistance to most effectively capitalize on natural synergies between climate mitigation and other development priorities; and supporting policies that address both climate and local environmental needs, such as improving air quality and reducing deforestation.

While this analysis has documented significant greenhouse gas mitigation in key developing countries, energy use and emissions will continue to climb as these countries attain higher levels of development. Far greater efforts to reduce emissions in both developed and developing countries will be required in the coming decades to avert the worst consequences of global climate change. These efforts must include stronger national policies as well as an evolving international regime that ensures adequate efforts by all major emitting countries. By highlighting the current and potential contribution of developing countries to emission mitigation, this report aims to enhance the prospects for stronger international cooperation toward the shared goal of climate protection.