Editor’s Note: Simon Zadek is an independent advisor to governments and business on the economic dimensions of sustainability. He is a Senior Visiting Fellow at the Centre for International Governance Innovation and the Global Green Growth Institute. He is founder of the international thinktank, AccountAbility. He blogs regularly at zadek.net/blog and tweets as @SimonZadek.
Simon Zadek advises governments on the economic dimensions of sustainability
Zadek: There are concerns that a deal will not be made at U.N. Climate Change conference in Durban
Says there needs to be a Plan B; world must not fall back on free-for-all aligned to narrow economic interests
Incentives must be given to countries already investing in green economies to cooperate
As world leaders struggle to prevent the global economy tipping into further economic crisis, negotiators from 195 nations are in Durban, South Africa at the U.N. Climate Change Conference. They are working to avoid the far greater economic and social meltdown threatened by climate change.
Whilst few dispute the serious risks climate change poses, there are legitimate concerns that the deal in discussion cannot be agreed, let alone effectively implemented.
What’s being discussed is a global deal involving binding commitments by wealthier nations to reduce carbon emissions. The deal also involves these nations footing a large part of the bill for financing action in poorer countries to reduce emissions and support communities hurt by climate change.
This plan is, frankly, unlikely to be agreed because of conflicts over the numbers – who does what, and who pays whom, how much, and for what.
But soldiering on valiantly may not be the best way to proceed – a “Plan B” may be in order. Right now, there is no coherent alternative under discussion. The current default is a free-for-all where what counts is political muscle aligned to narrow business and economic interests – that will not get the job done either.
The International Energy Agency estimates that $5.7 trillion must be invested in renewables alone by 2035 to avoid catastrophic climate change. Resource Revolution, a recent report by consultants McKinsey concludes that we have no clue how to produce more of critical natural resources – like water, minerals, land and food – needed to satisfy the demands of 2030’s estimated three billion global middle-class consumers. And that’s not taking into account the estimated six billion other people who will also be living in the world by then.
What’s needed is a Plan B that gets us beyond having to choose between the unlikely and the insufficient. It has to address the problem at scale, rapidly. Such a plan is possible – one that is grounded in international cooperation and that rewards innovation, investment and economic success, alongside responsibility and accountability for helping those in need.
Plan B needs to build on the early actions already being taken by nations and businesses.
Bloomberg New Energy Finance reports that as of 2010, global investment in clean energy has grown to over $240 billion from around $50 billion in 2004. Almost 100 countries, from Brazil to Germany and South Africa – many of the same ones that are arguing in Durban – have set ambitious targets for greening their energy. Many also have or are developing comprehensive low-carbon “green growth” plans.
Plan B needs to reward such ambitious, early action by enabling competitive advantage.
International competitiveness in the 21st century must be built on green, inclusive economies.
The World Economic Forum has published a sustainability-adjusted competitiveness index of nations that highlights just such opportunities for competitive advantage. It highlights risks to the competitiveness of countries that underestimate the importance of preparing their economies for a world with increasing climate concerns.
China plans to spend over $1 trillion on renewables and related electricity infrastructure by 2015, not only providing its citizens with clean energy but securing leadership in clean tech exports and investment. Denmark, Korea, Germany and others are doing the same.
Competition and international cooperation need to go hand-in-hand. On trade, first movers in greening their energy systems can work together as well as competing. A Sustainable Energy Trade Agreement is just one of many proposals that would establish mutually beneficial international arrangements between green economies.
And cooperation between nations, business and governments already lies at the heart of many ambitious green-growth plans. Morocco plans to sell its desert-based solar energy into the European market, establishing a new industry and creating jobs and growth. Ontario, Canada’s most populous province, has announced a multi-billion dollar investment in renewables in association with the Korean company, Samsung, to revitalize its economy in a green way.
The recent Global Green Growth Forum in Copenhagen profiled dozens of partnerships between business and governments working towards everything from electric vehicle standards to innovative means helping poorer communities access sustainable energy, and for unlocking private finance for green growth.
Redirecting the world’s financial assets – over $200 trillion at the last count – towards investing in a sustainable economy is a must. Reducing short-termism in financial markets, the very substance of today’s debate about financial market reform, would catalyze investments in tomorrow’s environment-friendly technologies and businesses.
Proposals for a tax on financial transactions to discourage short-termism, alongside other measures, would help. The growing size and influence of Sovereign Wealth Funds offers significant potential for policy-directed international financing.
Plan B is not just an interesting idea or a basis for criticizing the lack of progress in the climate negotiations. It builds on what we already know and are already doing. It is a strategy for ambitious change waiting to happen. The ingredients are, in fact, being energetically debated on the sidelines in Durban in an ideas marketplace where green activists mix with corporate folks and public officials and share every conceivable source of expertise.
Those who argue that it is “either a top-down deal on climate, or a freewheeling disaster” are either misinformed or disingenuous. International cooperation that blends the power of the market and public policy is where the smart money should be.
The opinions in this piece are solely those of Simon Zadek.