Nov 4, 2016 — pdf. Data on Switzerland’s emissions, reported by UNFCCC are available here: unfccc.int/files/ghg_emissions_data/application/pdf/
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Global Footprint Network 18, Avenue Louis – Casaï 1209 Geneva , Switzerland mathis.wackernagel@footprintnetwork.org www.footprintnetwork.org WATCH OUT, DEAR SWITZERLAND! ¦ November ,2016 ¦ Global Footprint Network Page 1 of 15 WATCH OUT, DEAR SWITZERLAND! Too small to act or too exposed to wait? Assembled by Mathis Wackernagel I am proposing a plan of action. It responds to the emerging risks of climate change and resource constraints. Yes, Switzerland has been economically successful. And if it choose s wisely, Switzerland can stay successful. But will it ? Table of C ontents .. .. .. .. 2 What we already know about our resource situation .. .. .. 3 Switzerland can succeed, but it needs to choose success .. . 6 Why it is risky to stick with old options .. .. 11 Closing Note .. .. .. .. . 12 ENDNOTES .. .. .. .. . 13
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WATCH OUT, DEAR SWITZERLAND! ¦ November 2016 ¦ Global Footprint Network Page 2 of 15 resource paradox Despite its limited natural resources, Switzerland shines as one of the world’s most competitive and innovative economies, with low unemployment, a highly skilled labour force, and a per capita GDP among the highest in the world . 1 But can this success last, given growing ecological constraints around the globe and the multi faceted impacts of climate change ? Is it necessary to stay within 2 ° C warming as the 2015 Paris Climate Agreement stipulates? 2 I f humanity do es not curb it s emissions, will climate change increase the resource pressure and its un predictab ility ? Switzerland is already heavily resource dependent. For instance, the country eats twice as much as it can grow. As a whole, it consumes four times as much as Swiss ecosystems can regenerate. 3 It does this even though Article 73 of the Swiss constitution urges that the Confederation and the Cantons shall endeavour to achieve a balanced and sustainable relationship between nature and its capacity to renew itself and the demands placed on it by the population Given the new era of climate change and resource constraints , what does Switz erland need to do to remain successful? Opinions vary widely, yet the stakes are high. Does resource dependence pose a significant risk to Switzerland? Or is it largely irrelevant, as current policies and investment patterns imply? These essential questio ns highlight the inescapable fact that Switzerland is at a crossroads. What are our options? We propose a new path. But before outlining our suggested response to the dilemma , we discuss why business – as – usual is less and less viable. Then we outline five steps which we believe are necessary for Switzerland to build a robust and successful future (page 7: Switzerland can succeed). urban plannin g, economic stability, international relations, and any other activity enabling success . In an overused and overstretched world, resource sovereignty 4 become s an ever more significant driver of a successful economy.
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WATCH OUT, DEAR SWITZERLAND! ¦ November 2016 ¦ Global Footprint Network Page 3 of 15 What we already know about our resource situation Despite the many uncertainties, some aspects are already clear. i. Assume that increasingly tight global resource trends a re largely a given . These persistent trends only shift slowly. It is possible that they can be redirected, but given the current level of weak international cooperation and focus on deregulation in countries like the US , it is improbable. Ecological constraints emerge as slowly as they can be overcome. These constrain ts whether it is climate change, receding ground water, land erosion; or whether it is population growth and the intensification of resource – dependent infrastructure . Some nations are taking steps to ward strengthening their resource sovereignty , especially on the energy front . Despite those efforts, changes are slow to manifest because of the inherent inertia of built infrastructure and the long time – delays governing population s ize . T urn ing the trends in the long run is possible , but the shift cannot occur from one day to the next. ii. Despite the proclaimed intents of the Paris A greement , efforts to decarbonize are not yet spreading at the required speed and scale to achieve the necessary res ults. 5 For instance, we still lack a clear plan and concerted effort s to exit the fossil – fuel economy. Yet n othing less is required to reach sustainability in parallel to lowering the current demand for biological resources. 6 its Ecological Footprint 7 is currently 60% higher than what the Earth can renew without even taking into account the fact that the 10 – 100 million wild species with whom we share the E arth also need space and resources . A t the current level of demand s on nature , humanity no longer operates in a safe resource space. 8 Yes, renewable energy technology is becoming more cost competitive. But it is not yet What does Paris tell us? The 2015 Paris A greement , which entered into force on November 4, 2016, stipulated: Global w arming should remain well below 2 ° C, possibly even 1.5 ° C above pre – industrial levels . Avoiding an increase over 2 ° C requires, according to IPCC reviewed c limate models , less than 450ppm CO 2e . atmospheric concentration . Further, 450ppm may be on the high 2 ° C upper long – term limit. In 2016, the atmosphere contain ed 40 3 ppm CO 2. Currently, humanity emissions increase the CO 2 concentration by 2 – 3 ppm per year. If we include non – CO 2 g reenhouse gases , the current concentration may be at 470 ppm CO 2e already . In other words , humanity has between minus 10 to plus 20 years of current emissions left to comply with Paris. Minus ten means humanity should have stopped emitting ten years ago. In Paris, Switzerland proposed to reduce its aggregate CO 2 emission 50% by 2030 compared to 1990 levels . In 2012, they were 97% of 1990 emissions .
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WATCH OUT, DEAR SWITZERLAND! ¦ November 2016 ¦ Global Footprint Network Page 4 of 15 compensating for the lack of political will to implement such technologies at scale. iii. Climate change and tightening resources are turning the g lobal economy into a negative sum game. Ecological overshoot is inevitably leading to the liquidation of natural capital. In addition, less natural capital amplifies the potential for overshoot. With weakened natural capital , i t becomes more difficult to adequately power and feed the global economy. Paradoxically, expanding a resource hungry economy, undermines the economy turns into a negative – sum game. iv. In the current situation, the of the Or at least it is not as dominant a force as often mista kenly claimed. No doubt, this negative sum game driven by resource liquidation has 9 elements. Examples thereof are CO 2 emissions from f ossil fuel in the atmosphere or fishing in international waters . But there are also significant elements in the global resource dynamics that are NOT driven by a Tragedy of the Commons : overusing ecological assets within the country or building resource – intensive infrastructure or infrastructure promoting more resource use . 10 11 Such infrastructure will likely turn into future stranded assets. While the time of occurrence of s uch feedback may be hard to predict, the type s of impacts are foreseeable. Still, acting against this negative sum game can be difficult, particularly if corrective actions are costly now while the gains are only harvested later. Q uick, automatic adjustm unlikely, since much demand is determined by drivers with large inertia such as urban form , energy efficiency of the housing stock , transportation infrastructure and population size. v. E alone does not make Switzerland safe. Contrary to what is often assumed, Switzerland is not always environmentally best – in – class . See for instance comparison to 13 OECD benchmarking countries quoted in a report prepared by BakBasel and Global Footprint Network for the Swiss government. 12 E ven if it were better than all the Biocapacity: the ultimate resource The Ecological Footprint is the biologically productive area needed to provide for everything people use: fruits and vegetables, fish, wood, fibers, and absorption of carbon dioxide, space for buildings and roads. Biocapacity is the productive area that can regenerate what people demand from nature. As we phase out fossil fuel — as anticipated in most imaginable scenarios — biocapacity will not only have to feed us. It also will have to help us replace fossil fuel. Therefore , dependence on biocapacity provides an overarching view on dependence. www.footprintnetwork.org
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WATCH OUT, DEAR SWITZERLAND! ¦ November 2016 ¦ Global Footprint Network Page 5 of 15 reference countries , 13 this would not automatically make Switzerland immune against resource risks . Fo r instance, all those countries have resource demands that are far from being globally replicable. vi. What really matters in the race for global biocapacity is relative GDP. Assuming that resource security is pursued through market exchanges rather than military means, winning in this current biocapacity What matters is not what I earn in absolute, but compared to what everybody else can spend on the resources for which all compete . international trade, 14 the global auction for harder and harder. Maintaining success in accessing the dwindling natural capital from abroad will become harder for economies whose relative income recedes compared to the rest of the world. This is already happening for most high – income countries vis – à – vis the emerging economies. The Swiss resident is now taking home a 30% smaller share of the global income than 25 years ago, and a 45% smaller share than 35 years ago. Therefore, Switze rland is caught in a bind: less and less relative income for Swiss economic agents as they are competing in the purchase of ever scarcer resources. vii. Planning to w in the relative income game forever is a fragile strategy . Switzerland still may be able to o utcompete all the other countries economically for many decades to come. But the odds of winning this bet are getting smaller , and the continuous ability to outperform all others is definitely not guaranteed over longer time periods. viii. E xiting the current game , too, has significant risks and costs. To not be exposed to this competition would mean to leave the global economy. But w ithdrawing from the global economy does not generate the necessary resources for the Swiss economy to operate , nor does it produc e goodwill in the world on . In other words, how can Switzerland keep engaging with the world while depending less on it? ix. Nor can Switzerland rely on self – corrective mechanisms . M ore specifically, market for ces do not necessarily provide sufficient feedback to ensure robust economic outcomes. Four significant self – regulating market mechanisms are often invoked in the context of resource constraints: price, technology, high income, and trade . All four are substitution mechanisms. Higher prices will reduce and/or shift demands or spur innovation. Trade allows us to overcome local constraints. And indeed, s ome resource substitution is possible . For example , houses can be built with bricks, rocks or wood. Rath er than eating fish, we can eat chicken or tofu . However, these mechanisms may not be strong and fast enough to self – regulate in view of the rapidly expanding global resources overshoot. Prices do not necessarily react adequately as shown in the carbon
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WATCH OUT, DEAR SWITZERLAND! ¦ November 2016 ¦ Global Footprint Network Page 6 of 15 dyn amics. Amazing new technologies like photovoltaics are possible, but take time to scale. So all these self – correcting mechanisms may not act swift ly and forcefully enough. Th e possib ility of s ignificant market failure s is important to consider , since th e consequences of such an occurrence may be costly or risky. It would be a blind spot for Switzerland to see itself as immune to resource shocks. Switzerland may well be a special case but is it truly too small, too rich, too singular and internationa lly too appreciated to ever fail ? Given th e reality that Switzerland, like any economy, cannot easily escape its resource dependence, preparing oneself for the predictable future is a good investment. In view of the immovable resource trends, it is dangerous to rely solely on international trade as the endless resources provider. If trade relationships were to become less reliable, how would Switzerland be able to bridge the gap between its resource consumption and its domestic resource availability? Recognizing this dilemma suggests that over the medium to long term domestic resource endowment becom e a significant driver of economic vitality and resilience . This recognition encourages eac h city or country to employ strategies that can address risks emerging from resource deficits. How can Switzerland succeed? How can it escape the resource trap? How can it avoid becoming hostage to its resource dependence? What follows is our answer. Switzerland can succeed, but it needs to choose success We live in a new world in which human activities have become large compared to what Earth can renew . To succeed, our strategies need to adjust to these circumstances. Five sequential steps explain how . They are true f or Switzerland or any community that intends to succeed . 1) Commit to your success. Succeeding starts with committing to your success. Such commitment requires the premise that escaping the current path is possible. Just performing less poorly than In contrast, we suggest playing for success. Planning for success requires exploring : W hat do we have to do to enable a world that works? In an increasingly global world, this may well mean that a world that works is a world that works for all . The reason is obvious: I f our solutions bake inevitable conflicts
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WATCH OUT, DEAR SWITZERLAND! ¦ November 2016 ¦ Global Footprint Network Page 8 of 15 becomes that much higher. (The box below shows how such assessments can be performed). TOOLS FOR CHOOSING SUCCESS Decision tools are needed to support government agencies and private investors in choosing the most effective policy and investment options. These are options that both increase our resource security while also generating financial benefits. These tools inform decision – makers on those two dimensions: 1) On the one hand, resource accounting such as Ecological Footprint or carbon accounting, is needed to assess to what extent policies, projects or programs reduce the resource dependence of an economy. 2) O n the other hand, comprehensive cost – benefit assessments help evaluate the financial net benefits of those initiatives. More comprehensive financial accounting needs to incorporate two improvements . First, it needs to help make explicit the assumed future , since this is the context within which the investment will have to operate. Second, it needs to make sure all relevant costs and benefits are accounted for , including pollution clean – up (costs) or skill formation (benefit). W e call such comprehensive cost – benefit assessments NPV PLUS. 16 Sustainable investments need to meet both the resource and the fiscal criteria. In other words, building a successful future is not a choice between austerity or stimulus. Rather it is about making sure that each investment can yield a double benefit: Footprint reduction AND financial viability. 5) Think ahead: Speed and scale. Acting for a resilient future cannot not merely be . R ather it is the essential driver in a strategy committed to success. Such a strategy requires a new mind – set: one with a systems – perspective . For instance, those aspects of our economic system that can only be modified slowly (such as infrastructure or demographic trends), and with time delay (think of the aging of key infrastructure such as power plants and dams), need the most attention early. The reason is that those aspects cannot be rectified at the last moment. Like super tankers, they need to be set on the right cours e earlier than agile small boats. Four key factors drive resource situation and therefore offer high – leverage intervention opportunitie s: How we build and operate our cities. The compactness and integrative zoning determines travel distances, energy efficiency of the housing stock defines
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WATCH OUT, DEAR SWITZERLAND! ¦ November 2016 ¦ Global Footprint Network Page 9 of 15 energy requirements, the way we build and equip our houses its materials demand. Good urban form can generate high quality of life on much less resource demand. How we provide energy. Is energy based on fossil fuel use, or solar power? Are we using the energy efficiently in our production and consumption processes? Cost – effective technology already exists today to decarbonize our energy system. How we feed ourselves. Food occupies a hu ge part of the productive areas of the planet. We can eat lower on the food chain and avoid food waste. How many we are. As we are more people on the planet there is less planet per person. Women empowerment through equal opportunity access as well as safe and affordable access to family planning lead to smaller and more prosperous families. EXAMPLE: Energy: A bright future is possible Today Switzerland can only produce a fraction of its energy through its own resources. Hydropower , currently now provides , or 9% of its total energy consumption . T he rest, including all fuels with the exception of a few wood chips, comes from abroad. In addition, the Paris Climate Acc ord has made clear the need to fully exit fossil fuel s by mid – century, if not earlier. Given that the future of transportation will most likely be electric, demand for power is bound to increase dramatically. Current energy policy is utterly unprepared to meet this challenge. What are the options? What should Switzerland do? At what speed and scale? Zwischen Ressourcenverknappung und Versorgungssicherheit: Zur Zukunft der schweizerischen Energieversorgung Prof. François Cellier docume nts the significant gap that exists between what a sustainable Switzerland needs and where our current energy plans fall. Prof. Gunzinger complements the book by showing that a renewable energy strategy for Switzerland is not only technically possible but offers Switzerland as a whole a clear net economic benefit. None of these approaches build on nuclear power, considered by both to be too expensive of an option. Rechsteiner and Swiss Cleantech confirm the perspective. 2000 W att Society in Switzerland has been a practical pioneer build ing the foundation of such a transformation. 17 Will Switzerland embrace this possibility? What is the benefit of clinging to business as usual?
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WATCH OUT, DEAR SWITZERLAND! ¦ November 2016 ¦ Global Footprint Network Page 10 of 15 EXAMPLE: Food for thought Context: 1. By 2050 , the world population is projected to reach 9 to 10 billion 18 . 2. Switzerland already procures half of its food outside of its borders. 3. The Paris Agreement requires a shift in agricultural practice, not only to reduce non – carbon greenhouse g as emissions, but also to wean agriculture off fossil – fuel inputs. At the same time, higher temperatures may challenge agricultural yields. If we subscribe to this context, how do we suppose Switzerland will be able to feed itself (and be carbon neutral)? What does this mean for us right now? How do we need to rethink our food system? What should be our goals, also considering that, as concluded by many forecasts, 10 million people will be living in Switzerland by 2050? Does Switzerland have to think more proactively about its food security, or will its financial resources always allow it to procure its food elsewhere? Would that mean that Switzerland just buys food away from others, or will this money help stimulate additional production, becoming a w in – win for everybody? Do our strategies hold when tested against the need to produce, harvest, store, and distribute agricultural products without the use of fossil fuel?
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WATCH OUT, DEAR SWITZERLAND! ¦ November 2016 ¦ Global Footprint Network Page 11 of 15 Wh y it is risky to stick with old options We live in a new world that requir e s fresh perspectives. Still, we can learn from and pick the best elements from past proposals designed to position Switzerland for continued success. Six archetypical responses reflect the essence of how different ideologies and perspectives have proposed to respond to the resource challenge and to make Switzerland resource secure. Conventional Strategy Limitation s and reduce global integration as much as possible (even if it reduces standards of living) to avoid the negative impact of cutthroat competition over resources. Increasing numbers of political platforms around the world, from left to right, advocate for increasing trade barriers to reducing global integration. Isolation could be limiting and risky . Also it is difficult to escape global markets easily or support a vibrant economy without some trade . Trade enable s production specialization and input diversification . Also, Switzerland is currently highly dependent on resources from abroad (its demand is fourfold of what its own ecosystems can produce). Further, such withdrawal might not stop the global resource dynamic or climate change, nor pro tect Switzerland against forthcoming negative impact. Withdrawing c ould be very costly and weaken Switzerland in the process. be to develop long – term bilate ral resource contracts with biocapacity – rich nations. Enabling this would require significant additional intervention by the government (since hitherto most resources are traded privately and not via government – sponsored channels). This strategy could be seen as a danger from the neutrality tenet. This strategy will only work if : a) potential partner countries respond to maintained without political vassalage and inconsistency with other international obligations, and only if transport lines are secur e , and if b) the ensuing special relationship with the supplier country is found acceptable by the Swiss people. Negotiating such long – term contr acts may be politically challenging, including on the domestic front, and would require significant government intervention and investments. Is Switzerland ready for it? – and accelerate your economic output in order to keep up with, or even outdo, emerging economies. To succeed in the resource competition requires increasing the relative income of the Swiss for as long as possible. and keeping up with emerging countries over the long – haul, may prove difficult. Already today Switzerland maintains a strong competitive advantage through unique strategies that may not be easily replicated elsewhere. Still current growth rates are far lower than those in emerging markets. It may not be real istic to expect new strategies that can economies. Also, if these strategies required more resources in order to succeed, the gains in economic advantages would have to increase even faster. keep maximizing the global integration benefits through a strong Swiss brand 19 as long as it lasts, and set up a sovereign fund as an insurance . A sovereign fund (capitalizing on the current economic advantages) needs to be large enough to allow Switzerland to reengineer its economy when it There is still uncertainties and r isk involved with this approach since adjusting later may be cheaper (due to improved technology) or costlier (reengineering infrastructure takes time and reacts inadequately to politically volatile resource contexts). Even more importantly, is there enough political will to divert
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