Mark Kenber, CEO, The Climate Group, on climate policy and the low carbon economy
- 07 June 2011
Orginally published in Planet Earth magazine, June 2011.
Mark Kenber, CEO, The Climate Group, shares his views on carbon markets, low carbon economy and climate policy with Sheetal Vyas, in India's Planet Earth magazine, June 2011.
His experience spans international groups and is founded on a solid 15 years work in the field of climate change and international climate policy. Mark Kenber, CEO of The Climate Group, has also advised UK Prime Minister Tony Blair in the joint policy initiative Breaking the Climate Deadlock (2008-2009). The initiative resulted in a series of high-level reports outlining the economic and technological rationale for a global climate deal and its key components. A carbon markets expert, Mark Kenber also co-founded the Verified Carbon Standard (formerly Voluntary Carbon Standard) (VCS), which interestingly now a recognised kitemark for the US$ 400-million voluntary market.
SV: It’s a difficult task convincing people that the global climate is changing. Following the failure of the two most hyped climate summits (at Copenhagen and Cancun respectively), there seems to be more scepticism associated with the term climate change. How do you see it?
MK: Belief in climate science and the coming impacts has not diminished globally, despite the disappointment in Copenhagen and the challenges made to the scientific basis for climate change. There is certainly doubt about the ability of the UN process to deliver the much-needed global agreement to build on the Kyoto protocol but Cancun showed that there is still interest and commitment from the overwhelming majority of governments.
Similarly, more countries than ever from both the developed and developing world are implementing domestic climate strategies that are marrying the need to prevent dangerous climate change with the recognition that many lowcarbon policies have significant social and economic benefits.
SV: What has been the role played by the Climate Group in spreading awareness? How far have you succeeded?
MK: The Climate Group has based its work on creating a plausible, viable and desirable vision of what a low carbon future might look like for the world. Amongst other ways we have done this is by providing evidence from cities, states, regions and corporate entities that it is not only possible to reduce emissions way beyond what is demanded by current policy but it is possible to do so in a way that reduces costs, increases profits and revenues and creates jobs.
Given that the debate over climate change and climate change policy in particular has focussed in the past on how to share the burden or cost of action, we have made a point of showing that this is not about cost or burdens but rather about the opportunities that derive and can be harnessed from the shift to a low-carbon economy.While this work is clearly ongoing and forms the basis of our Clean Revolution campaign, if we consider the change in the way that climate change is discussed since we started our work in 2004, I think that it is fair to say that we have been fairly successful.
Our reports Carbon down, Profits up began to shift the way governments thought about what was obviously a false dichotomy between environmental action and economic growth and the plethora of initiatives around green growth, low carbon development, clean industrial and energy revolution is at least in part due to the work of the group.
SV: Though promoted as a success, the package of deals at Cancun, underlined a failure. What do you think was the main reason why a deal failed?
MK: It would be wrong to say categorically that Cancun was either a success or failure. While it clearly failed to agree the binding international agreement envisaged in the Bali action plan and expected at Copenhagen, given the disappointment of a year earlier and the real risk that the UN Climate process might collapse, Cancun did manage to bring countries back together and maintain some hope for an ambitious agreement in the future. Much more is obviously necessary but Cancun did for the first time lead to international agreement on the 2C temperature goal, recognition that current efforts are not sufficient and agree a number of concrete actions on technology, finance and adaptation. The GOI and Minister Ramesh played an important role in making this happen.
SV: What plan of action do you think the UN should take to ensure that every country, especially the big emitters, agrees to substantial emissions cut, because amicable discussions across the table have failed to produce results that can be acknowledged?
MK: Global action will necessarily require agreement between nation-states; nation-states are where sovereignty, legitimacy and policy jurisdiction lies and the UN has no power of its own to impose and enforce agreements. So, a negotiated agreement will be essential: while industrialised countries must take the first step and raise their ambition levels as a precursor for action by others, a new agreement must also build on existing commitments and targets
and look at how collaboration can raise the collective level of ambition.
SV: Have climate change and global warming become dirty words, considering the amount of doubt and misrepresentation of data that’s been witnessed in the recent times?
MK: In some countries it might appear so, but I think that in almost all the nations of the world people are still and increasingly aware of the threat posed by climate change. Concerns around data provided on climate change, particularly by the University of East Anglia and the misinformation about glacier melting in India, have been investigated by a number of independent expert panels.
These reviews have shown that underlying climate science is still robust and the evidence we have seen in the last 12 months suggests that it is increasingly so. Therefore, I think that the uncertainty last year will prove to be just a blip and both governments and people increasingly will be driven by their concerns for climate change to take greater action and put policies in place.
SV: The India’s Clean Revolution report shows how a low-carbon economy could actually help India to survive. However, the country’s role in the recent climate talks has been more or less indicative of its dependence on a fossil-fuel based economy. Do you see such a change happening?
MK: The shift to a low carbon economy will not be something that happens overnight. However, it is not only desirable from the perspective of the global climate, India’s energy security, provision of energy access and balance of payments, but also achievable and perhaps the only way to guarantee India’s long-term prosperity. The key thing now is to develop a medium and long-term strategy and provide clear policy signals to support them.
SV: Recently, EU climate change commissioner Connie Hedegaard succeeded in increasing the emissions cut target from 20 per cent to 25 per cent. Why do you think other negotiators have failed in similar attempts?
MK: The Climate Group is absolutely convinced that increasing the ambition levels of the European climate policy makes sense not only from a climate change perspective for Europe, the world and as a spur for greater ambition in international climate negotiations, but also for the European economy.
Analysis has shown that the 20 per cent target that is already in force can be met by current action alone and to a large extent will be costless. The 30 per cent target, while incurring some short-term cost, will put Europe on a road to low carbon innovation, create export opportunities for its high value-add businesses and also reduce costs in Europe, as energy and other resources are used more efficiently and more productively.
As a net importer of energy, saving on import bills for energy, for fossil fuels and in particular reducing its reliance on fossil fuels from unstable areas of the world can only be good for Europe’s climate security, national security and its economy. Clearly all policy measures that imply a change, especially structural change, will run into opposition and it is the potential losers who often shout louder than those who look set to win, especially when winners come in the medium and long term.
However, the evidence will suggest that even for those who think they will be adversely affected by increased ambition in the European climate policy will find that there is an overwhelming benefit for all sectors of business and the economy.
SV: Economists and analysts in some parts of the world have predicted a slow death for the carbon market. Recent reports also talk of banks pulling out of the carbon market. How is the carbon market set to fare in the future?
MK: It is clear that the uncertainty over the future of climate policy and the failure of industrialised governments outside of Europe, to put in place
binding national targets backed up by emissions trading schemes, has weakened to a certain extent the push for a global carbon market that seemed so strong only a few years ago.
This uncertainty has obviously reduced the price of carbon credits in the international market and has led to uncertainty for investors who are using carbon pricing as the basis for investment into low carbon technologies and projects. However, the EU Emissions Trading Scheme is committed to continue through to 2050 with a downward line in the carbon cap which would increase the ambition of the target.
We are seeing discussions around emissions trading still on the table in Australia, in New Zealand where it has already been implemented, in Japan, at state level in the US and also in a number of developing countries. For example, China is discussing using market mechanisms as outlined in its recent “12th Five Year Plan”, while India is about to introduce its “Perform, Achieve and Trade Energy Efficiency Trading Scheme” and similar measures are being discussed elsewhere. So I think that the carbon market will continue in the future.
Many believe and evidence suggests that markets remain the lowest cost and most efficient way of driving emissions reductions. I think the fact that the voluntary carbon market is still growing, underpins the enthusiasm for carbon markets. While they will not be sufficient on their own to address climate change, I believe that carbon markets will remain a key part of the low-carbon policy tool box used by many governments. For this reason I think that carbon trading is set to continue and will strengthen going forward.
SV: Do you think that reforming the Clean Development Mechanism (CDM) tructure would be of any help?
MK: Yes. The project-by-project approach of the CDM will continue to be useful for small, less developed countries, but for larger emerging economies a more strategic approach is needed that supports market transformation at the sectoral level and generates far larger flows of capital into low-carbon
technologies is needed.
SV: What future do you forsee for the global economy, when placed against climate change?
MK: The only future for the global economy that will ensure long-term sustainable prosperity is the lowcarbon development path embodied in the Clean Revolution. A high-carbon path may sustain growth in the short term, but it is not compatible with long-term sustainable prosperity. This is as true of India as anywhere else in the world.