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Business out of Climate Change


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  • 1. Tokyo International Exchange Center 25th RESEARCH & PRESENTATION BUSINESS out OF CLIMATE CHANGE Pranab J. BARUAH Research Fellow, The University of Tokyo 9-Sep-2008 1
  • 2. Climate Change Cause: -Increasing GHGs -Inefficient machines producing heat (?) GHG: Green House Gas CO2 is one of GHGs Fig: Data: Meehl et al. (2004)
  • 3. Climate Change Impact Cereal Production Positive impacts negative impacts Source: IIASA,
  • 4. Climate Change Impact Water Resources
  • 5. Impact on coastal areas Impact on Health Sea-level rise in Nile Delta Increase of Tropical Disease like malaria Source: Marten P. et al. (1995) Source: UNEP-Grid
  • 6. Climate Change Impact Natural Disasters May be fewer hurricanes but stronger …. Cyclone Nargis, Myanmar, 2008 Death: 146,000 Damage: US$10 Billion Hurricane Katrina USA, 2005 Death: 1836, 705 missing Damage: US$80.9 Billion ….deadlier ones
  • 7. Climate Change Impact Economy- loss by Flood and Weather $US Billion 300 200 100 1960-1969 1970-1979 1980-1989 1988-1997 Total Loss Insured Loss
  • 8. Climate Change- An Economic Issue According to IPCC 4th Assessment Report Min. rise of 1.8 deg and Max. estimate 4.0 deg in 2100 Stern Review, 2006 -On current trend, temperature will rise 2-3 deg in 50 years -With a 5-6 deg warming in 2100, 5-10% loss of global GDP -Poor countries suffering costs in excess of 10% GDP -benefits of US $2500 Billion from mitigating climate change
  • 9. Climate Change- An Economic Issue Abating GHG for Mitigating Climate Change Benefits Cost of From Reducing Reducing GHG GHG Cost of carbon Abatement Level 10 9 Emission Level 3 2
  • 10. Why Businesses are to thinking about Climate Change Governments are moving to reduce the cost for future - Jump before being pushed - Competitive advantage - Resources are becoming limited Also, new stakeholders like banks and insurance companies are arriving at the scene. This “green wave” is presenting an unprecedented challenge and opportunities to companies. A New Paradigm Shift •Business not only to create best product/service but sustainable products/services •Businesses to save the world without sacrificing our lifestyle, economic progress
  • 11. GHG Emissions CO2 is the most important GHG Source: IPCC
  • 12. Business from Mitigation Vehicle Smartgrid Solar CleanTech Water Fuelcell Filtration (GreenTech) Wind Source: Clean Revolution Green Biofuel By Pernick and Wilder Buildings Indirect Direct Low carbon Energy Carbon Finance Low carbon Technology Sectors Carbon Energy Efficiency of funds Business Carbon Capture & Sequestration Consultancy Landuse/Landcover Management
  • 13. Vinod Khosla, Khosla Ventures : “The best brains in the country are no longer working on the next drug or the next Silicon Revolution. They want to work on energy” Silicon Valley’s Next Big Thing ?
  • 14. Business for/from climate change From $7.9 Billion in 2007. US Market
  • 15. Solar Wind Biofuel Solar Hotwater Source: CleanEdge Global Investments 2007 Solar Biodiesel Wind REN21
  • 16. Source: CleanEdge
  • 17. Production of Biofuel Ethanol from ETHANOL Corn, sugarcane etc. BIODIESEL Biodiesel from Vegetable Oil etc. Source: CleanEdge
  • 18. Global Investment in Clean Energy in 2007 (US$ Billion) Source: CleanEdge
  • 19. World Indices vs. NEX Renewable Energy Index Source: SEFI/New Energy Finance
  • 20. Transportation Going for Renewable Energy, New Technologies Hybrid-Toyota Prius 100% Ethanol Compressed Air Car -Tata MDI 100% Electric
  • 21. Transportation Going for Efficiency, in Design - Sleeker smaller cars for single person - Highly maneuverable cars for urban area Electric and Hybrid Three wheeler- /3 wheeler- Aptera Carver One Motors With
  • 22. Transportation Going for Efficiency, in Fuel Use USA EU CHINA JAPAN GHG Emission for cars
  • 23. Carbon Finance : Carbon funds - Buying carbon credits to meet Kyoto obligations and funds investing directly in projects. - Private funds driven by returns than compliance - Public funds are raised mainly to manage CDM/JI Carbon Funds 2000-2007 Source: New Carbon Finance
  • 24. Future Driven by Demand and New Technology 2007 2020 Population 6.6 billion 8 billion Cars 800 million 1000 million Only 3% of world car with biofuels, electricity or hydrogen Convergence of Technologies & sectors in future
  • 25. Source: CleanEdge
  • 26. Source: CleanEdge
  • 27. Source: CleanEdge
  • 28. Next Generation Biofuels No competition between food and fuel CORN SUGARCANE CELULLOSIC (Wood, Grass,Waste) GHG 91% less 22% less 56% less than Gasoline Energy Output to Input 36.0 8.0 1.3 Source: National Geographic
  • 29. Role of Information and Communication Technology (ICT) -Increasing Efficiency & Dematerialization -Impact in Transport, Building, Industry & Power (smart grid) CO2 due to ICT in 2020 2002 2020 no reduction Reduce 5 times of what it emits 2020 with reduction CO2 reduction by ICT in 2020 reduction by other method Source and Copyright: SMART 2020 The Climate Group
  • 30. Upcoming Technologies and businesses with great potential Carbon Capture and Storage Capture GHG from coal etc. & store in deep earth, ocean. Not economically feasible yet. Clean Coal technology Already there, but high cost. Co-generation Capture energy lost as heat during some manufacturing processes and use it to generate electricity or to run a different process.
  • 31. What it all means to general public
  • 32. Increasing public awareness is driving corporate decisions Why your company take climate change into consideration Reputation Customer choice Media Source: McKinsey Global Institute Report
  • 33. Common People should be rightly aware to reward green companies with green product and punish those doing “Greenwashing”. Ecolabels Source: Futerra
  • 34. Concluding Remarks Climate change is posing new challenges and creating immense opportunities for businesses. New businesses and technologies are evolving to mitigate climate change and provide sustainability. Correct awareness is and will be shaping good policies and right policies will push green businesses for sustainability. Thank you !