The earth has moved: big business’s radical climate shift is now unstoppable

Clive Hamilton

The most surprising revelation here at the Paris climate conference has been the astonishing shift in the world of investors over the past 12 months. There is now unprecedented momentum towards participating in the transition to a low-carbon economy, and the view at the “big end” of the conference is that a strong agreement will provide an extra shove. It’s unstoppable now.

It’s not that investors and chief executives have had an ethical epiphany about climate change; it’s just that they can see where the world is headed, and it makes sense to be part of it rather than being stuck in the economy of the 20th century. As US Secretary of State John Kerry said yesterday: “While we’ve been debating, … the clean energy sector has been growing at an incredible rate.”

Contrast that with Australia, for instance, where the attitude of the business community has always been “we don’t want to be at the forefront of global action”. The old fossil fuel companies still have the dominant voice in the public debate and in the policy process. It may take another year for what’s happening across the world to sink in, but the complaint will increasingly become “we don’t want to be left behind”.

So what are the dimensions of this shift in business and investor sentiment? I wrote last week about how investors are running ahead of governments, as shown for example by the quiet revolution in the growth of green bonds, and by the Montreal Carbon Pledge under which large investors have committed to measuring and reporting on the carbon footprint of their portfolios. In a little over a year, this pledge has been signed by investors controlling more than US$10 trillion in assets.

More immediate abatement action is to be found in the so-called Science Based Targets initiative, under which 114 large corporations have pledged to reduce their emissions in a way consistent with the 2℃ objective. Big corporations including Ikea, Coca-Cola, Dell, General Mills, Kellogg, NRG Energy, Procter & Gamble, Sony and Wal-Mart have already signed up and are implementing plans.

Dell, for example, has pledged to reduce emissions from its facilities and logistics operations by 50% by 2020 (relative to 2011 levels), and to reduce the energy intensity of its product portfolio by 80% by 2020.

These corporations have not decided that principles should outweigh profits; they have decided that, looking over the next several years, sustaining profitability requires that they shift to low-emission energy. One factor weighing on corporate minds is exposure to risk in energy markets, which are likely to be more volatile and uncertain partly because of the growing challenge posed to fossil energy.

Central bankers are now anxious that a rapid, structural shift in energy markets and the destruction of asset-value in some of the world’s biggest companies may disrupt the global financial system. As I reported, the governor of the Bank of England Mark Carney speaks of the need for an “orderly transition” to a zero-carbon economy.

This unprecedented business commitment feeds into, and is partially stimulated by, the Lima-Paris Action Agenda, which wound up yesterday and must be considered one of the standout successes of COP21. The number of mayors, governors, chief executives and investment managers who have arrived here to declare publicly their commitment has been unparalleled.

Yes, the message of this conference is that something big has shifted in the world.

The Conversation

Clive Hamilton, Professor of Public Ethics, Centre For Applied Philosophy & Public Ethics (CAPPE)

This article was originally published on The Conversation. Read the original article.


Everyone knows climate adaptation is crucial, but beyond that it’s pretty hazy

Jessica Hellmann, University of Minnesota

Most of the international and scientific community knows that adaptation is a vital part of how the world will confront climate change. Gone are the days when we worried that adaptation was a distraction from mitigation. Now we know the two concepts go hand in hand. Climate change has started and will continue for coming decades, thanks to the greenhouse gases we have already emitted, and continue to emit. On the other hand, adapting to the extreme climate change that would come about if we carried on with business as usual would overwhelm adaptation in much of the world.

While there is broad agreement that adaptation (and therefore money) is needed, there are many aspects of adaptation that remain quite murky. Several of these have been discussed at COP21 over the past few days. To make progress in reducing the effects of climate change worldwide, we will need to rapidly overcome these adaptation shortcomings.

We have no idea how much adaptation will cost, beyond expecting it to be a lot.
In 2010, the World Bank released a report suggesting that by 2050, adaptation might cost between US$70 billion and US$100 billion per year.

At a COP21 session on finance, the United Nations Environment Programme announced that the World Bank’s numbers could even be underestimates, once you factor in all sectors and look beyond the middle of this century. In some respects, this does not matter because public commitments to adaptation internationally are just a small fraction of either estimate anyway.

So here, broadly speaking, is what we know (and don’t know) about climate adaptation so far:

Some costs of adaptation remain unaccounted for.

Some costs are easier to estimate than others. For example, we can readily estimate the cost of increased fertiliser use or reinforcing buildings and infrastructure. But we know that climate change will also undermine the resilience and functioning of natural ecosystems that provide essential services.

The costs of shoring up, relocating, or reintroducing those services is largely unknown. Furthermore, according to UNEP, only 14% of adaptation spending is currently directed to natural resource management. Most of it currently goes to agricultural projects. We will need to expand those expenditures to ecosystem restoration and preservation.

We lack ways to evaluate the success of adaptation.

International agencies have a long track record of evaluating development activities by collecting data where projects are implemented in comparison to areas where they are not. In theory, this method can be used to evaluate adaptation projects as well, but the timescale of adaptation is different than traditional economic development. In adaptation, the environment will be different at the start of the project than at the end, and we will want to know not if the project has improved on the original situation, but rather whether it is durable under future conditions. We must develop new standards for judging when adaptation activities have been successful.

Adaptation actions are not yet helping vulnerable people.

In a presentation at the weekend McGill University researchers reported two interesting results from their study on country-level adaptation activities, based on reporting provided to the UNFCCC each year.

First, they found that the wealthier a country is, the more it spends on adaptation. This suggests that adaptation activities may limited by the availability of funds.

Second, they found that high-income countries are making little or no progress on adaptation for vulnerable populations, including the poor, the elderly, and indigenous groups. The poor and vulnerable will need the most adaptation so this apparent inequality will need to be fixed.

There still is disagreement about what adaptation even is.

At an adaptation session co-hosted by the University of Maryland, McGill University, the ND Global Adaptation Index and others, some debate focused on the definition of adaptation itself. Klaus Radunsky, an Austrian member of the UNFCCC Adaptation Committee, offered (in my opinion) the best definition of adaptation:

It is all the extra effort that we will need to put in, thanks to climate change, to achieve the recently announced UN Sustainable Development Goals.

The Sustainable Development Goals invite us to end hunger, deliver clean water to people around the world, and protect vital ecosystems. It will take the best of humanity to achieve these goals, and climate change will make getting there even harder. We will need climate change adaptation to reach these goals, and we need to understand adaptation better to do it right.

The Conversation

Jessica Hellmann, Professor of Ecology, Evolution, and Behavior; Director, Institute on the Environment, University of Minnesota

This article was originally published on The Conversation. Read the original article.