7.5.3 Development Projections
The establishment of long-term projections for GHG emissions is particularly
complicated and uncertain for both developing countries and the EITs. These
economies are often in a transition process in which important GHG emission
sectors, such as the energy sector, industry, and transportation, are expected
to play an increasing role. It is not possible, however, to project accurately
the actual speed of this growth process and/or the GHG emission intensity of
these future activities. Modelling tools and data are also very limited or even
non-existent, and the only available information sources from which to generate
GHG emission projections are often the official national development plans that
cover a time horizon of 510 years only.
Changes in the structure of GDP have to be given careful consideration. One
important aspect that could be integrated into the scenario development are
the changes in economic structure and relative prices that emerge from structural
adjustment programmes and other macroeconomic policies that many countries are
currently undertaking. Another crucial issue, following that, will be the development
of energy intensive and heavily polluting industrial activities, such as steel
and aluminium production. As the recent shift of heavy industries from the developed
towards the developing countries reaches its end, long-term economic output
could come from services and other less energy-intensive activities. In EITs
the issue is how fast and deep will the shift out of energy intensive industries
be, and what will replace it.
The basic uncertainty of long-term GHG emission projections encourages analysts
to use multiple baselines, each corresponding to a particular expectation of
the future development pattern. Each development pattern may exhibit a unique
emissions trajectory. A nation following development policies that emphasize
greater investments in infrastructure, such as efficient rail transport, renewable
energy technologies, and energy-efficiency improvements will exhibit a low emissions
trajectory. However, a nation with substantial coal resources, scarce capital,
and a low level of trade can be pushed towards a development path with high
The spatial distribution of the population and economic activities is still
not settled in the developing countries. This raises the possibility of adopting
urban and/or regional planning and industrial policies to strengthen small and
medium cities and rural development, and thus reduce the extent of the rural
exodus and the degree of demographic concentration in large cities. In the same
way, technological choices can substantially decrease the energy demand and/or
GDP elasticities. The preservation of a certain cultural diversity, as opposed
to the trend towards a global uniformity of lifestyles, also favours less energy-intensive
housing, transportation, leisure, and consumption patterns, at least in some
cases. One example is related to development policies that avoid low urban population
density coupled with long daily trips to work and large shopping centres by
It is a special challenge in costing studies to translate preferences for biological
and cultural diversity into a useful value measure. The market does not price
most of the services provided by biological or cultural diversity. Roughgarden
(1995) argues that there is no need to quantify the benefits of these services,
which are either so obvious or impossible to capture that measurement is unnecessary.
Following this line of argument, science should dictate a target
that could be used to establish a safe minimum standarda level of preservation
that guarantees survival of the species or culture in question (Ciriarcy-Wantrup,
1952). This minimum standard approach puts an infinite value on avoiding extinction.
This view puts biological or cultural diversity beyond the reach of economic
trade-offs, and the analyst attempts to find the least-cost solution to achieve
some set standard.
However, Epstein (1995) argues that preservation without representation of
benefits is unacceptable. It is suggested that hard evidence is needed to prove
that the biological and cultural preservation benefits dominate those from development.
It is then logical to compare the costs and benefits when resources are scarce,
and an attempt should be made to balance the costs and benefits so that funds
are allocated to their highest valued use.
Estimating the social value of biodiversity and culture is a major challenge.
For biodiversity values there is no consensus as to the usefulness of the primary
tool used to reveal the monetary value of these preferencescontingent
valuation surveys. These public opinion surveys use a sequence of questions
to put a monetary value on personal preferences. However, since people are responding
to a survey rather than facing their own budget constraint and actually spending
their own money, no market discipline exists to challenge their statements (Brown
and Shogren, 1998).
The above possibilities of alternative development patterns highlight the technical
feasibility of low carbon futures in the developing countries that are compatible
with national objectives. However, the barriers to a more sustainable development
in developing countries can hardly be underestimated, from financial constraints
to cultural trends in both developed and developing countries, including the
lack of appropriate institutional building. Any abatement-cost assessment relies
on the implicit assumptions taken in the baseline or mitigation scenarios with
regard to the probability of removing these barriers.
Since mitigation costs for different development patterns may vary substantially,
one way to reflect this in mitigation cost analysis is to use a scenario-based
range of mitigation costs rather than a single mitigation cost (see also Section