Report from Davos: Climate change stays in the picture
- 04 February 2009
The mood in Davos last week was unquestionably sombre; the financial crisis weighed heavily on every agenda. As Chair of the World Economic Forum's Global Agenda Council on Climate Change, I fielded countless versions of the same question: is it still possible to achieve a global agreement on climate change in Copenhagen this December?
I believe it is.
The Challenge Ahead
The challenge is undeniably immense. A successful agreement will require binding targets and commitments of all major countries, commitments that will see global carbon dioxide emissions peak and then start to rapidly decline by 2020. It will require deep cuts in emissions the US and the rest of the developed world. It will need US$50-200 billion a year in funding for the developing world to help finance clean energy, energy efficiency and adaptation to the climate impacts that many countries already are already experiencing.
Reasons for Cheer
Despite the immensity of the task, and overriding concerns about the recession, climate change was far from off the agenda at Davos. I have come away from the Summit with four particular reasons to be cheerful.
. Firstly, whilst the world has not fallen out of love with the market economy, the relationship is at least a little bruised. We have been powerfully reminded that the market needs a framework. We know that there are issues where government must lead, and where business wants it to.
. Secondly, at a time when the US federal government is about to inject over $800 billion into its economy and we have poured vast sums into the ailing finance sector, US$50 billion dollars for climate change no longer sounds like quite so much money.
. Thirdly, we have seen that the world is connected like never before. Like a long line of wobbly dominos, we have seen the subprime mortgages in the US lead to the collapse of Icelandic banks whilst UK investors worry about their deposits.
. Fourthly, we finally have a climate champion in the White House. This week I saw Al Gore looking optimistic for the first time in a long time. Countries that once hid behind the Bush Administration have no place left to hide.
In short, the economic and political backdrop has fundamentally shifted, opening up a new world of possibilities for a global deal and a global shift to the low carbon economy.
Stimulus for a Prosperous, Low Carbon Economy
On the last night of the Summit, UK Prime Minister Gordon Brown asked a group of experts and business leaders to develop recommendations on stimulus packages for the April G20 meeting of finance ministers and heads of state.
These stimulus packages can power the transition to the low carbon economy. If well-designed, they will generate green jobs, from wind farms to home insulation. And they will lay the foundations for the global deal.
This requires not tinkering at the edges but a transformation: zero emission electricity and smart grids, buildings that make their own power, fast electric vehicles with no exhaust fumes. We can't afford to stimulate the old economy and just build roads and fix bridges. We must seize the opportunity to set the framework for - and invest in - the growth of the new low carbon economy.
There is a huge amount to do in a limited time and success is far from guaranteed. But we simply cannot allow ourselves to fail.