Jerry Brown is the governor of California. He spoke ahead of the UN Secretary-General's Climate Leadership Summit about politics and the value of his state's emissions trading system in building a healthier, cleaner future. The state's economy is growing, and its climate work is setting a pace for the nation.
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:
Climate change presents serious and growing risks to the global economic system, with a number of recent studies showing the impact that climate change is already having on livelihoods and business models. For example, extreme weather, which can be exacerbated by climate change, caused economic losses of US$2.6 trillion from 1980 to 2012.
Addressing these risks is an economic and societal imperative. At the same time, it presents opportunities. Climate-smart investments in efficient, clean infrastructure, clean energy, resilient agriculture, and water resources offer stable, attractive returns for investors and communities when the conditions are right.
This week, I was in Lima at the Peruvian government’s Climate Finance Week and found many reasons to be optimistic that we can turn the climate challenge into an economic opportunity. This blog post shares some key themes that I took away from the event.
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.
About 80 government representatives from more than 30 countries just concluded the 9th Assembly of the Partnership for Market Readiness (PMR) – three days of rich discussions on various domestic policy instruments that put a price on carbon, such as emissions trading systems (ETS), carbon taxes, and payments for emission reductions. At the same time, private sector firms are arriving in Cologne to attend Carbon Expo which runs until the end of the week.
A timely “rendezvous” between the two sectors – public and private – took place today on the subject of carbon pricing policies. The event, hosted by the World Bank’s PMR, the International Finance Corporation, and the International Emissions Trading Association (IETA), invited leading private firm and government representatives to discuss the initial findings of a study by the PMR and the Center for Climate and Energy Solutions (C2ES), which interviewed three companies – Rio Tinto, Shell, and U.S. utility Pacific Gas & Electric (PG&E) – on how they are preparing for a carbon price.
Also available in: Français
"This meeting is going to be different. It’s going to be a turning point from the lofty, theoretical policy deliberation to real action on the ground to save our planet’s green lungs and our global climate." Those were my thoughts last week when I walked into a packed conference room in Brussels, Belgium, where a crowd of about 80 people from around the globe had gathered to learn about cutting-edge proposals from six pioneering developing countries with big, bold plans to protect forests in vast areas of their territories.
Chile, the Democratic Republic of Congo (DRC), Ghana, Mexico, Nepal, and the Republic of Congo came to the 9th meeting of the Carbon Fund of the Forest Carbon Partnership Facility (FCPF) to convince 11 public and private fund participants to select their proposal as one of a small group of pilots intended to demonstrate how REDD+ can work.