The high-level segment of the UN climate talks is starting here in Lima. It's a different mood today than in previous climate talks and a different conversation, with both a sense of urgency and clarity of objective. There has been a lot of discussion around carbon pricing, in particular, with representatives from countries, cities, states and industry saying the question now is how quickly we can move.
Sitting on the train heading back from New York to Washington D.C., gazing out of the window at stressed watersheds, I had some time to reflect on a very special Climate Week. What does it all add up to? Where does it leave us as a global community needing speed and scale in our climate action?
Much is being written. Let me add a perspective. Here are three thoughts amid my swirl of memories, moments and impressions.
Climate osmosis – the street reaches the hallowed halls
It was difficult to stand in the canyon that is 6th Avenue, with a sea of people stretching in both directions – environmental activists, nurses, pensioners, business people, every possible faith community, moms, a sprinkling of celebrity and a dash of statesmen – and not be moved. On the Sunday before the Summit, more than half a million people took to the streets in People’s Climate Marches in New York and more than 160 countries across the globe. The marchers demanded climate action from their leaders, suggesting that the politics of climate action, once considered too hard to handle, might no longer be as difficult as leaders think.
The reverberations continued for 48 hours and became a point of reference in almost every speech at the UN Secretary-General’s Climate Leadership Summit. More than 120 heads of state and government came to hint and in some cases pledge action on climate change. New coalitions of governments, businesses, investors, multilateral development banks and civil society groups announced plans to mobilize over $200 billion for low-carbon, climate-resilient development. Forests and cities were big winners, landing pledges of around $450 million for forests and bringing together more than 2,000 cities in a new Compact of Mayors to help improve accounting of urban greenhouse gas emissions and the actions cities are taking to reduce them.
Fred Krupp is the president of the Environmental Defense Fund, one of several civil society organizations supporting a price on carbon. He spoke ahead of the UN Secretary-General's Climate Leadership Summit about how a price on carbon could bring shared propserity and economic growth.
By Stewart Elgie, Professor of Law & Economics at University of Ottawa and Chair of Sustainable Prosperity; Ross Beaty, Chairman of Pan American Silver Corp. and Alterra Power; and Richard Lipsey, Professor Emeritus of Economics at Simon Fraser University.
We often hear claims that a carbon tax would destroy jobs and growth. Yet the evidence from a Canadian province that actually passed such a tax – British Columbia – tells a very different story.
The latest numbers from Statistics Canada show that B.C.’s policy has been a real environmental and economic success after six years. Far from a “job killer,” it is a world-leading example of how to tackle one of the greatest global challenges of our time: building an economy that will prosper in a carbon constrained world.
A dangerously warming planet is not just an environmental challenge – it is a fundamental threat to efforts to end poverty, and it threatens to put prosperity out of the reach of millions of people. Read the recent Fifth Assessment Report from the Intergovernmental Panel on Climate Change if you need further evidence.
If we agree it is an economic problem, what do we do about it? There is general agreement among economists that a robust price on carbon is a key part of effective strategies to avert dangerous climate change. A strong price signal directs finance away from fossil fuels and toward a suite of cleaner, more efficient alternatives.
This logic is not lost on governments and companies. Momentum is building around the globe to put a price on carbon. Consider these facts:
We’re about 16 months away from the 2015 UN climate meeting in Paris, intended to reach an ambitious global agreement on climate change. Now, more than ever, there is a need for innovation to scale up climate action.
The Bank’s Carbon Partnership Facility (CPF) is helping blaze that trail.
The role of the CPF is to innovate in scaling up carbon crediting programs that promote sustainable, low-carbon economic growth in developing countries. In its first set of programs, the CPF moved past the project-by-project approach to larger scale through the Clean Development Mechanism’s Programme of Activities, catalyzing investment in methane capture from landfills, small-scale renewable energy, and energy efficiency.
Someone once told me that all it takes is that first visit: once you have the dust of Africa on your feet, it will pull you back, again and again. This was before I knew that I would one day be part of the team leading delivery of the annual Africa Carbon Forum.
And so, it has come to pass: every year, and this was the sixth edition, the forum pulls its stakeholders together to build capacity on issues of climate change, and to help raise a voice for Africa on issues like the UN climate negotiations or policy discussions on the revision of the UN’s Clean Development Mechanism (CDM).
Since it was established, the Africa Carbon Forum has grown into what is often described as the leading event in Africa for players in energy and carbon markets. In the last four years, we have met in Marrakech, in Addis Ababa, in Abidjan, and now in beautiful Windhoek, where the splendid weather last week reminded me of just what we stand to lose if our mitigation efforts are not successful. I was not as fortunate, but a wonder-struck colleague spoke about the family of cheetahs that ran past the car as he drove in from the airport. Are we one of the last generations that will see these beautiful creatures in the wild because their habitat will change due to new climate patterns?
At the Forum's opening plenary (pdf), the Namibian Minister for Environment and Tourism, the Honorable Uahekua Herunga, urged us to work together to make carbon markets work for Africa and prepare the continent for future carbon trading. But, he insisted that developed countries need to act first and that mitigation actions should be taken within the UN’s Framework Convention on Climate Change (UNFCCC). He asked that the forum sends a powerful message from Africa to the 2015 UN climate meeting in Paris about mitigation opportunities in Africa.
The call for a price on carbon is growing louder in the corridors of business and government. Last week, former U.S. Treasury Secretary Hank Paulson wrote in The New York Times that climate risks are perhaps the biggest “known unknown” that we face, and he asked “farseeing business leaders” to demand a price on carbon—it’s the quickest, most efficient way to manage these risks.
Paulson was previewing the Risky Business report, which calculated the economic impact of climate change on U.S. businesses’ balance sheets. A few days later, CDP released a report on corporate use of internal carbon pricing.
CDP surveyed executives to find out why leading businesses are already valuing carbon to future-proof their business plans. It is interesting to note that some of the largest U.S. utilities, including American Electric Power and Exelon, price carbon in an effort to avoid stranding large fossil-fuel-fired power plants and to reassure investors. Other less carbon-intensive businesses use internal prices to help achieve corporate sustainability goals—TD Bank aims to go carbon neutral, and Walt Disney Corporation (as well as Microsoft) uses internal pricing to encourage employee innovation while delivering profits. The value of encouraging more sustainable growth like this came through this week in the World Bank Group’s new Adding Up the Benefits report, which calculated the value of climate-smart development in lives, jobs, and economic growth, as well as the climate.
Packing an extraordinary amount of energy in little space, fossil fuels helped propel human development to levels undreamed of before the Industrial Revolution, from synthesizing fertilizers to powering space flight. But alongside energy, they produce health-damaging air pollutants and greenhouse gases.
Today, greenhouse gas emissions are higher than at any time in at least 800,000 years and rising, causing climate changes that threaten to reverse decades of development gains. Disruption of livelihoods, loss of food security, loss of marine and coastal ecosystems, breakdown of infrastructure, threats to global security: these are just a few of the risks identified in recent scientific reports.
In the absence of technology to permanently remove greenhouse gases and restore atmospheric concentration to safe levels, there is only one realistic solution: limiting additional emissions. It is estimated that to avoid the most damaging effects of climate change, over the next few decades we can at most emit a quantity equal to about 20 percent of total proven fossil fuel reserves.
Given fossil fuels’ omnipresence in our economies and lives, leaving them in the ground will have important implications, starting with the value of the very assets.
I knew there was something different about Carbon Expo this year as I looked up during the opening ceremony and noticed the room was packed, with standing room only for late arrivals.
That is when I first asked myself: I know why I am here, but why are you here? I felt like a veteran carbon warrior among a sea of young fresh-faced carbon players.
I started coming to Carbon Expo in 2004, and this year, for the first time, there are plenty of people I don’t recognize. So today I took some time to ask people what they were doing here and why there seems to be a growing interest in carbon markets.