Download ppt - Business And Climate Change March 12 2009

Business and Climate Change

Birkbeck College, University of London, March 12 2009

Lecture to MSC Corp Gov and Ethics Class. Toby Webb, course [email protected]

Business and Climate Change The future?

Business and Climate Change Climate change: The facts (well, some of them)

• Climate change is happening!

• It's definitely man-made, whatever else nature is doing

• Research shows accelerated warming since 1950

• Earliest rough measurements began around a century ago

• Some species: Costa Rican frogs, already extinct due to CC

• Pre-industrial levels were around 280 PPM in 1750 (guesswork extrapolated from 1850)

• Earth currently at 380-90 PPM CO2

• Top ten years in highest ever temperatures since 1990

Business and Climate Change Extreme weather is here to stay…


• If we stabilize at 400 PPM: 50/50 chance of 2 Degree rise

• BUT only pollution (aerosols reflecting solar radiation) is keeping us below 400 PPM now!

• At 550 PPM there is a 50/50 chance of a 3 Degree rise, (which could be 4.5-5 if wrong)

• Currently: Headed for 2-3.5 degree rise in next fifty or so years

• This could rise to 5-12 degrees by 2099 (different temps in different areas, season and latitude dependent)

• IPCC says "peak carbon' date is 2015 = Copenhagen negotiations in 2009 vital as Kyoto set to expire!

Business and Climate Change Extinct in the wild soon?


• Signs: Lowest ever recorded Arctic sea ice in 2008

• Some say summer sea ice (supports Polar Bears) may go in ten years (IPCC had said 100 years!)

• Many earlier predictions on CC are now being brought forward, some changes accelerating

• Feedback loops: Output from an event or phenomenon in the past influences the same event/phenomenon, increasing speed of change

• In 100 years: possible one meter rise in sea levels world-wide: Huge rise in flooding, disease, migration


Your insurance will cost more…

Business and Climate Change What will GHG's and global warming affect?

• Temperatures / Rain Pattern / Sea Levels / Glaciers (60,000 retreating) / Ice Caps / Sea Ice / Extreme Weather events

• By 2080 UK could be seeing up to 4.5 degree rises in Summer months: Huge impact on agriculture, water, health

• Increased risk of conflict: Bangladesh, climate refugees, Darfur, African agriculture, water shocks)

• Ocean acidification: impact on coral, fish stocks, sea biodiversity

• Agriculture will be hugely affected: Tropics and poles see more rain. Semi arid areas will see less (Mediterranean)

• Global biodiversity will change, species will die out, natural resources will be affected

Business and Climate Change Tuvalu: Potential climate refugees


• Goal should be to limit rise to 2 degrees above pre-industrial levels(1750, 280 PPM)

• Reality will be more like 4 degree rise: Suggestions are: Mitigate for 2, prepare for 4

• OECD nations (the richest!) need to cut CO2 output by 80% by 2050

• UK only country to have passed laws mandating this, BUT:Keep changing the targets: E.G. 26% by 2020, then 34% by 2020, then 42% by 2020

• 50% global reduction in CO2 needed by 2050 to aim for 2 degrees. Unlikely to happen!

• EU target is to cut emissions by 30% on 1990 levels by 2020 (Poland all coal!)

• IPCC's budget is tiny! $30 million a year: what GE spends on R&D every 3 days!

Climate change: The predictions

Business and Climate Change Kilimanjaro: Lot less snow – and national parks

Business and Climate Change McKinsey scenarios:

1) No change in policy = temp rise up to 7 degrees / 1-2 billion people overwhelmed / 4 bn people at risk RE water / total ice cap melt / Amazon may die

2) Dev nations lead the way, spend $350 bn per year by 2030 = sea levels rise / low level islands threatened / hunger increases slower than scenario 1 / Canada and Northern Europe become more productive / Major increase in extreme weather events

3) Global action, spend is $565 bn per year by 2030 = World warms only 2 degrees / hotter areas suffer on crop yields / some ice at poles remains / increase in bad weather and floods, but manageable / tropical disease spread is significant, but limited

Business and Climate Change Bangladesh: Heading north?

Business and Climate Change The future agenda: policy

• Need to value ecosystem services (forests, wetlands, mangroves, peat bogs, clean air etc)

• Externalities need to be internalised (cost of running coal plant don't include pollution)

• Science and technology will be vitally important

• Tackling emissions from agriculture v difficult area due to politics and trade disputes!

• Voluntarism in environmental progress has not been seem to work. Solutions both regulatory, structural and incentive based

Business and Climate Change Maldives: Looking to move…


• Governance structures are vital: OECD nations need to tighten up, developing nations must understand the challenge

• Technology transfer to developing nations (China, India, Brazil etc) will be vital. IP disputes must be resolved

• Energy subsidies, structures of energy market and investment must be reviewed: Renewables growth needs to be massive

• Other key areas: Coal use / Vehicles / Agriculture / Carbon capture and storage / Forestry / Nuclear / Switching coal to gas

The future agenda: policy

Business and Climate Change Ethiopia: Farming issues…

Business and Climate Change The future agenda:

• Electric vehicles and electrified transportation systems: Toyota, Hybrids, plug in cars...

• Decarbonised electricity: power generating firms and CCS

• Decentralised power generation: renewables

• Big solar technology (concentrated solar power, mirror farms): big energy firms and start ups need serious incentives

• Improvements to what we have: insulation, efficiency gains: British Gas, utility, DIY firms

• Biofuels: second generation (non food crops): BP, many others..Shell's energy scenarios interesting. Search EthicalCorp.com for article

Business and Climate Change Business a big climate factor

Business and Climate Change The future agenda:

• Carbon capture and storage has to play one of the biggest roles. BUT is still in infancy. Nothing coming online until at least 2020

• Only test projects exist: Canada, Algeria, Norway, China, but technology mostly used to take out oil! Uses lots of water and power

• Dozen EU demonstration projects under way in EU. RWE building power plant with CCS built in

• If CCS is problematic, or does not work - what then?

Sources: ClimateChangeCorp.com / Tyndall Center / Hadley Center /Professor Bob Watson, Chief Science Adviser, DEFRA, Head of Tyndall Center. March 10 2009


Biodiversity not just on land…

Business and Climate Change The future agenda: consumers

• Increased awareness vital

• Concern about severe lack of current awareness

• "Tragedy of the commons" worries: mutual 'destruction', the 'what can I do' attitude

• Governments, institutions, business needs to tackle apathy

• Incentives needed:

White goods labelling, carbon labelling, pricing incentives on flying, transport, energy sourcing, insulation

Business and Climate Change Larson B Ice Shelf: Melting fast

Business and Climate Change What companies are doing:

• Corporate sector directly responsible for at least 40% of all greenhouse gas emissions

• Firms have stopped denying climate science! (BP in 1997, Exxon in 2008)

• Joint corporate statements urging for long term market based frameworks

• Companies such as: BP, BA, BT, Ford, HP, HSBC, Rio, Toyota signed up with CEOs. USCAP in US does similar work

• Companies said they wanted to make investments AND have investor surety on frameworks

• Lobby groups such as the CBI in UK urged action for several years, before every major summit

• Some US companies found to be members of lobby groups on different sides of the debate! (USCAP)

Business and Climate Change Sunsets may get more spectacular…


• 2009 PWC CEO survey said that 40% of CEOs were not concerned about CC

• 7% extremely concerned, while 42% were extremely concerned about economic downturn

• Suggestions of climate fatigue among businesses in current economic climate

• Many big companies have done the 'easy wins' on energy efficiency. Where next in recession?

• Aviation has been in denial: 2% of emissions, 5-6% by 2050.

• Now industry says will use 10% alternative fuels by 2017

Business and Climate Change Sea levels will rise…


• Wal-Mart is committed to being supplied 100% by renewable energy, creating zero waste and selling environmentally-friendly products

• Coke has a 5% absolute reduction target for its business and that of its bottlers, plus intensity targets for refrigeration equipment

• BT has 80% carbon emissions target by 2020

• ArcelorMittal, Corus and ThyssenKrupp setting up 1 billion Euro research project on gas recycling and CCS in EU

• M&S Plan A. 100 targets, 20% achieved. One aspect: Think Climate Wash at 30C campaign proved big success: increasing the level of 30C washes carried out by M&S customers from 23% to 31% in the first year of Plan A, saving about 25,000 tonnes of CO2.


The first official climate change casualty


• Tesco: Launched a £100 million climate technologies fund, pledged to cut energy usage per square foot by 50% by the beginning of next year compared to 2000 levels, to cut emissions in half by 2020, triple its recycling, and improve in-store climate communications for customers.

• Iberdrola: world’s largest provider of renewable energy: 44GW of renewable assets at different stages of development, 95% of it wind power.

• Waitrose: committed to cutting its CO2 emissions by 10% by 2010, from 2001 levels through a carbon management programme

• Unilever has reduced CO2 emissions in manufacturing operations by more than 30% over the past decade in absolute terms. In 2006, sourced 14.8% of its energy from renewable sources, of which 8.2% it generated itself.

• Lafarge: 20% cut in net emissions per tonne of cement worldwide and a 10% cut in absolute emissions in industrialized countries by 2010, from 1990 levels.



• BUT: These are all big companies.

• "Medium" and "small polluters" for example not done much.

• UK Carbon Reduction Commitment set to change this by 2011. Allowances to be given, then auctioned…

• Other SME's and SME's in other countries doing v little beyond basic environmental compliance.

• Campaigners argue only regulation will work...


Business and Climate Change Buzzwords and what they mean

• Footprint: "Total set of GHG (greenhouse gas) emissions caused directly and indirectly by an individual, organization, event or product” (UK Carbon Trust 2008)

• Neutrality: "Achieving net zero carbon emissions by balancing a measured amount of carbon released with an equivalent amount sequestered or offset"

• Offsetting: "Financial instrument representing a reduction in greenhouse gas emissions. Offsets are typically generated from emissions-reducing projects"

Business and Climate Change Can we make green cool for consumers?

Business and Climate Change Buzzwords and what they mean

• Intensity: In companies, increases efficiency per unit or facility but does not limit overall emissions growth of the organisation

• Supply chain emissions: "Emissions generated by indirect associates to the organisation: First, second, third tier suppliers, and that generated by their products"

• Carbon labelling: "Show products' carbon footprint and help people make green shopping decisions" (in theory!)

Business and Climate Change More resources: Much more on emissions trading, regulation etc in this report:

Countdown to Copenhagen: Government, business and the battle against climate change (Economist Intelligence Unit)

And on www.ClimateChangeCorp.com/ www.ethicalcorp,com / [email protected]

IPCC website

UK Government websites: DEFRA, Energy and Climate Change Ministry

Greenpeace website

Plus many others, just search around….