Mark Kenber: A global climate deal is not only the right choice; it is the smart one.
- 04 March 2015
Mark Kenber, CEO, The Climate Group, explains why 2015 is such a critical year for climate action and low carbon investment, reminding us that while the global climate talks this December in Paris are not the economy's only opportunity, a global deal is a smart choice for a cleaner, safer and more prosperous future.
This year can – and must – be the tipping point for climate action.
The above phrase is hardly new, to me or anyone else who has worked on climate change over the last 20 years. And, though we’ve made an incredible amount of progress in that time, we haven’t made the game-changing transformation we all know is needed.
This year things are different, though. The world is watching.
In December, heads of state and government will gather in Paris for the global COP21 climate talks to attempt to hammer the final details on a new and binding climate treaty.
Unlike previous attempts at agreement, Paris is not designed to be the end of a process, but rather the beginning of an inexorable shift to a prosperous and climate-resilient low carbon economy. This signal – to the business community and the public alike – that there is no turning back, is as important as the content of the agreement itself.
A deal is obviously crucial because the scientific consensus is clear: emissions need to stop rising before the end of this decade and start falling pretty soon after that.
The next five years are therefore critical. But it isn’t just governments who must act now. Paris is also important because of the actions that will both drive and be driven by a treaty to curb emissions. Innovative business leaders can also turn climate change into a valuable opportunity, by supporting a successful outcome at COP21.
So here’s their solid business case.
Today the global low carbon economy is worth an impressive US$5 trillion. And it grew on average 11.8% per year in 2007-2010, compared to only 2.4% for the global economy as a whole. Clean technology is commercially viable and ready for scale-up.
Forward-looking businesses are already seeing the benefits of their low carbon investments. A 27% internal rate of return on average to be precise, according to a recent We Mean Business report.
Inevitably, economies that moved early are now leading the way. China is the world’s biggest investor in clean energy, spending a record US$89.5 billion last year to account for almost 29% of the world’s total renewables investment.
Then there’s the extraordinary global job creation. The International Renewable Energy Agency reports close to 1 million renewable jobs were created in 2013 alone, led by the solar industry. What’s more, the UN says the low carbon economy could bring 60 million more jobs over next 20 years.
And if we combine the scientific impetus with the economic benefits of acting on climate change, there’s even less reason to delay action. Because action saves money – and inaction costs money. A lot of money.
The New Climate Economy report reveals that if we continue on our current path, in the US alone, US$66-106 billion worth of coastal property will likely be below sea level by 2050.
But its authors also explain that boosting investment in energy efficiency, smart infrastructure and clean technologies in cities would not only lower pollution, but save more than US$3 trillion in investment costs.
In fact, 50-60% of all the actions required to cut emissions in most countries will also drive economic growth.
So there really is no excuse. We know the technology is proven, reliable and profitable. We also know that if we don’t act now the costs will be unbearable. The stage is set, we just need to act. Cue Paris. Or more importantly, cue the next nine months.
Over the rest of 2015, business must demand that governments deliver the deal they need to make their long-term low carbon investment decisions. In the first instance, this means ensuring that countries’ domestic actions – their Intended Nationally Determined Contributions, or INDCs - create a domestic framework that is attractive for investment.
Rather than seeing their INDCs as being the least they can get away with internationally while retaining a modicum of credibility, governments should be treating them as investor prospectuses, designed to attract the brightest and best business of the low carbon future.
The clean economy will grow and will provide opportunities – the winners will be those who attract the most and highest quality investments. Clear policy frameworks that transcend party politics are the key to this.
Thankfully there are many signs we will have a successful outcome. Last year, the EU’s increased climate targets for 2030, the historic US-China deal, and Climate Week NYC and UN Climate Summit in New York were just some of the moments that reinforced the political, business and social momentum for climate action.
But while some countries, regions, cities and businesses are leading the way, it is far from enough. We need all countries, businesses and investors onboard to secure a strong outcome in Paris – and reshape an old, expensive and dangerous fossil fuel-powered economy.
And while Paris is not the only opportunity we have, it must be a key milestone that propels us toward a cleaner, safer, more prosperous future.
A global climate deal is not only the right choice; it is the smart one. We hope you will join The Climate Group and its business, government and civil society partners in forging a long-term vision that is good for people, and good for the economy.
Let’s lead the clean revolution.
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