Business opportunities and economic potential central as climate secretary Ed Davey unveils Paris plan
By Megan Darby
Climate change “is the big daddy of all risks” for the insurance industry, says Mark Wilson.
The Aviva CEO donned his wellies to visit flood-hit parts of the UK earlier this year. “I saw our customers with tears in their eyes,” he says. “They were feeling the very personal effects of what climate can do.”
His business is in a prime position to assess climate change risks, which he says could become “impossible to price and impossible to insure” if nothing is done.
Wilson is setting the scene for the UK’s strategy in the run-up to Paris 2015, when climate negotiators aim to strike a global deal.
Energy secretary Ed Davey has chosen Aviva’s offices in the City of London from which to lay out his intentions, 15 months ahead of the crucial summit.
The choice of panel speakers – three from the world of business and one environmentalist – underlines the point: this is a mainstream economic issue, not a fringe green concern.
Green growth
It chimes with the mood music for Ban Ki-moon’s climate summit in New York on 23 September.
The UN secretary general has invited heads of state to attend and 125, including US president Barack Obama and UK prime minister David Cameron have accepted.
China’s Xi Jinping and India’s Narendra Modi are notable exceptions.
But there has been an increasing emphasis on what business leaders can bring to the forum.
Katja Hall, deputy director of the Confederation of British Industry, says: “Business gets this. We are on board. We know we are part of the problem; we want to be part of the solution.”
And New Climate Economy, a global commission chaired by former Mexico president Felipe Calderon, will make the case in a report next week for green growth.
Jeremy Oppenheim, programme director for the NCE, says “we simply don’t see a trade-off” between cutting carbon emissions and economic growth.
There are “tremendous opportunities” for both rich and poor countries, he says. “If we get energy efficiency right, that drives through our ability to afford the renewable energy and low carbon systems we need.”
New dawn
With negotiators keen to avoid a repeat of the 2009 climate summit Copenhagen, when fractious talks ended with a weak agreement, countries are being encouraged to trail their intentions far in advance of the Paris meeting.
And they draw encouragement from developments in the green economy in the past five years – a “bottom-up” surge of national and regional initiatives to narrow the gap with “top-down” emissions caps proposed at the UN.
In terms of timing, if nothing else, by coming out with this report now the UK can claim to be a world leader.
Davey says “momentum has shifted decisively” and put a global deal “within reach”.
While he criticises “backsliding” from Japan, Australia and Canada, he notes that nearly 500 climate laws have been passed in 66 countries. And he hails action from the “big four” emitters: China, the US, Europe and India.
2C or not 2C?
Observers to the process are also starting to articulate their expectations for Paris, and the tone is cautiously optimistic.
There are two big questions. Will the Paris deal be enough to limit temperature rises to the agreed 2C threshold? And how legally binding will it be?
To get to 2C, negotiators will have to find a balance of obligations on different countries that all accept as “fair”. The UK report suggests what that might look like.
Developed countries are expected to submit national contributions to that effort by next spring, ahead of Paris, but there is no guarantee they will add up to the right number.
Regional 2030 emissions targets suggested by IPCC review of effort share approaches (Pic: DECC)
Some are already preparing for the eventuality the deal doesn’t hit the 2C sweet spot.
Jennifer Morgan, director of climate at the World Resources Institute, told RTCC it would be important to look at what was happening within countries as well as the headline emission caps.
“Those are things that have scaling potential that I think are not captured in a pure accounting exercise,” she said.
“I hope 2C will still be within sight. I don’t think we have seen that level of ambition yet.”
If Paris puts the right “architecture” in place, Morgan added, there could be opportunities to ratchet up the targets every 5 years.
Political will
Sam Smith of WWF will not be content with a deal that falls short of 2C.
“If you spend a lot of time talking to climate scientists, as I do, it makes it hard to sleep at night,” she says.
“What you understand is the next decade is going to be really critical. The other thing we are hearing from climate scientists is: it is not too late.”
The degree of “bindingness” is also up for debate. US president Barack Obama is reportedly looking for ways round a legally binding treaty, so he does not need to get it ratified by a hostile senate at home.
Davey’s language hints at some leeway on both fronts. He says: “A global agreement needs a rules-based system that tracks progress, creates trust and allows us to ratchet up ambitions to meet the science.”
The pledges in New York in two weeks’ time are crucial to show just how much (or little) political will there is to make that happen.