Business And Climate Change March 12 2009

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Business and Climate Change lecture given in March 2009 to students on my CSR course as part of the Birkbeck College Corporate Governance and Ethics MSC. Birkbeck is a college of London University.

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Business And Climate Change March 12 2009

  1. 1. Business and Climate Change Birkbeck College, University of London, March 12 2009 Lecture to MSC Corp Gov and Ethics Class. Toby Webb, course lecturer [email_address]
  2. 2. Business and Climate Change The future?
  3. 3. Business and Climate Change Climate change: The facts (well, some of them) <ul><li>Climate change is happening! </li></ul><ul><li>It's definitely man-made, whatever else nature is doing </li></ul><ul><li>Research shows accelerated warming since 1950 </li></ul><ul><li>Earliest rough measurements began around a century ago </li></ul><ul><li>Some species: Costa Rican frogs, already extinct due to CC </li></ul><ul><li>Pre-industrial levels were around 280 PPM in 1750 (guesswork extrapolated from 1850) </li></ul><ul><li>Earth currently at 380-90 PPM CO2 </li></ul><ul><li>Top ten years in highest ever temperatures since 1990 </li></ul>
  4. 4. Business and Climate Change Extreme weather is here to stay…
  5. 5. Business and Climate Change <ul><li>If we stabilize at 400 PPM: 50/50 chance of 2 Degree rise </li></ul><ul><li>BUT only pollution (aerosols reflecting solar radiation) is keeping us below 400 PPM now! </li></ul><ul><li>At 550 PPM there is a 50/50 chance of a 3 Degree rise, (which could be 4.5-5 if wrong) </li></ul><ul><li>Currently: Headed for 2-3.5 degree rise in next fifty or so years </li></ul><ul><li>This could rise to 5-12 degrees by 2099 (different temps in </li></ul><ul><li>different areas, season and latitude dependent) </li></ul><ul><li>IPCC says &quot;peak carbon' date is 2015 = Copenhagen negotiations in 2009 vital as Kyoto set to expire! </li></ul>
  6. 6. Business and Climate Change Extinct in the wild soon?
  7. 7. Business and Climate Change <ul><li>Signs : Lowest ever recorded Arctic sea ice in 2008 </li></ul><ul><li>Some say summer sea ice (supports Polar Bears) may go in ten years (IPCC had said 100 years!) </li></ul><ul><li>Many earlier predictions on CC are now being brought forward, some changes accelerating </li></ul><ul><li>Feedback loops : Output from an event or phenomenon in the past influences the same event/phenomenon, increasing speed of change </li></ul><ul><li>In 100 years: possible one meter rise in sea levels world-wide: Huge rise in flooding, disease, migration </li></ul>
  8. 8. Business and Climate Change Your insurance will cost more…
  9. 9. Business and Climate Change What will GHG's and global warming affect? <ul><li>Temperatures / Rain Pattern / Sea Levels / Glaciers (60,000 retreating) / Ice Caps / Sea Ice / Extreme Weather events </li></ul><ul><li>By 2080 UK could be seeing up to 4.5 degree rises in Summer months: Huge impact on agriculture, water, health </li></ul><ul><li>Increased risk of conflict : Bangladesh, climate refugees, Darfur, African agriculture, water shocks) </li></ul><ul><li>Ocean acidification : impact on coral, fish stocks, sea biodiversity </li></ul><ul><li>Agriculture will be hugely affected: Tropics and poles see more rain. Semi arid areas will see less (Mediterranean) </li></ul><ul><li>Global biodiversity will change, species will die out, natural resources will be affected </li></ul>
  10. 10. Business and Climate Change Tuvalu: Potential climate refugees
  11. 11. Business and Climate Change <ul><li>Goal should be to limit rise to 2 degrees above pre-industrial levels (1750, 280 PPM) </li></ul><ul><li>Reality will be more like 4 degree rise : Suggestions are: Mitigate for 2, prepare for 4 </li></ul><ul><li>OECD nations (the richest!) need to cut CO2 output by 80% by 2050 </li></ul><ul><li>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 </li></ul><ul><li>50% global reduction in CO2 needed by 2050 to aim for 2 degrees. Unlikely to happen! </li></ul><ul><li>EU target is to cut emissions by 30% on 1990 levels by 2020 (Poland all coal!) </li></ul><ul><li>IPCC 's budget is tiny! $30 million a year: what GE spends on R&D every 3 days ! </li></ul>Climate change: The predictions
  12. 12. Business and Climate Change Kilimanjaro: Lot less snow – and national parks
  13. 13. 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
  14. 14. Business and Climate Change Bangladesh: Heading north?
  15. 15. Business and Climate Change The future agenda: policy <ul><li>Need to value ecosystem services (forests, wetlands, mangroves, peat bogs, clean air etc) </li></ul><ul><li>Externalities need to be internalised (cost of running coal plant don't include pollution) </li></ul><ul><li>Science and technology will be vitally important </li></ul><ul><li>Tackling emissions from agriculture v difficult area due to politics and trade disputes! </li></ul><ul><li>Voluntarism in environmental progress has not been seem to work. Solutions both regulatory, structural and incentive based </li></ul>
  16. 16. Business and Climate Change Maldives: Looking to move…
  17. 17. Business and Climate Change <ul><li>Governance structures are vital: OECD nations need to tighten up, developing nations must understand the challenge </li></ul><ul><li>Technology transfer to developing nations (China, India, Brazil etc) will be vital. IP disputes must be resolved </li></ul><ul><li>Energy subsidies, structures of energy market and investment must be reviewed: Renewables growth needs to be massive </li></ul><ul><li>Other key areas: Coal use / Vehicles / Agriculture / Carbon capture and storage / Forestry / Nuclear / Switching coal to gas </li></ul>The future agenda: policy
  18. 18. Business and Climate Change Ethiopia: Farming issues…
  19. 19. Business and Climate Change The future agenda: <ul><li>Electric vehicles and electrified transportation systems: Toyota, Hybrids, plug in cars... </li></ul><ul><li>Decarbonised electricity : power generating firms and CCS </li></ul><ul><li>Decentralised power generation: renewables </li></ul><ul><li>Big solar technology (concentrated solar power, mirror farms): big energy firms and start ups need serious incentives </li></ul><ul><li>Improvements to what we have: insulation, efficiency gains: British Gas, utility, DIY firms </li></ul><ul><li>Biofuels : second generation (non food crops): BP, many others.. Shell's energy scenarios interesting. Search EthicalCorp.com for article </li></ul>
  20. 20. Business and Climate Change Business a big climate factor
  21. 21. Business and Climate Change The future agenda: <ul><li>Carbon capture and storage has to play one of the biggest roles. BUT is still in infancy. Nothing coming online until at least 2020 </li></ul><ul><li>Only test projects exist: Canada, Algeria, Norway, China, but technology mostly used to take out oil! Uses lots of water and power </li></ul><ul><li>Dozen EU demonstration projects under way in EU. RWE building power plant with CCS built in </li></ul><ul><li>If CCS is problematic, or does not work - what then ? </li></ul><ul><li>Sources: ClimateChangeCorp.com / Tyndall Center / Hadley Center / Professor Bob Watson, Chief Science Adviser, DEFRA, Head of Tyndall Center. March 10 2009 </li></ul>
  22. 22. Business and Climate Change Biodiversity not just on land…
  23. 23. Business and Climate Change The future agenda: consumers <ul><li>Increased awareness vital </li></ul><ul><li>Concern about severe lack of current awareness </li></ul><ul><li>&quot;Tragedy of the commons&quot; worries: mutual 'destruction', the 'what can I do' attitude </li></ul><ul><li>Governments, institutions, business needs to tackle apathy </li></ul><ul><li>Incentives needed: </li></ul><ul><li>White goods labelling, carbon labelling, pricing incentives on flying, transport, energy sourcing, insulation </li></ul>
  24. 24. Business and Climate Change Larson B Ice Shelf: Melting fast
  25. 25. Business and Climate Change What companies are doing: <ul><li>Corporate sector directly responsible for at least 40% of all greenhouse gas emissions </li></ul><ul><li>Firms have stopped denying climate science! (BP in 1997, Exxon in 2008) </li></ul><ul><li>Joint corporate statements urging for long term market based frameworks </li></ul><ul><li>Companies such as: BP, BA, BT, Ford, HP, HSBC, Rio, Toyota signed up with CEOs. USCAP in US does similar work </li></ul><ul><li>Companies said they wanted to make investments AND have investor surety on frameworks </li></ul><ul><li>Lobby groups such as the CBI in UK urged action for several </li></ul><ul><li>years, before every major summit </li></ul><ul><li>Some US companies found to be members of lobby groups on different sides of the debate! (USCAP) </li></ul>
  26. 26. Business and Climate Change Sunsets may get more spectacular…
  27. 27. Business and Climate Change <ul><li>2009 PWC CEO survey said that 40% of CEOs were not concerned about CC </li></ul><ul><li>7% extremely concerned, while 42% were extremely concerned about economic downturn </li></ul><ul><li>Suggestions of climate fatigue among businesses in current economic climate </li></ul><ul><li>Many big companies have done the ' easy wins ' on energy efficiency. Where next in recession? </li></ul><ul><li>Aviation has been in denial : 2% of emissions, 5-6% by 2050. </li></ul><ul><li>Now industry says will use 10% alternative fuels by 2017 </li></ul>
  28. 28. Business and Climate Change Sea levels will rise…
  29. 29. Business and Climate Change <ul><li>Wal-Mart is committed to being supplied 100% by renewable energy, creating zero waste and selling environmentally-friendly products </li></ul><ul><li>Coke has a 5% absolute reduction target for its business and that of its bottlers, plus intensity targets for refrigeration equipment </li></ul><ul><li>BT has 80% carbon emissions target by 2020 </li></ul><ul><li>ArcelorMittal, Corus and ThyssenKrupp setting up 1 billion Euro research project on gas recycling and CCS in EU </li></ul><ul><li>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. </li></ul>
  30. 30. Business and Climate Change The first official climate change casualty
  31. 31. Business and Climate Change <ul><li>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. </li></ul><ul><li>Iberdrola : world’s largest provider of renewable energy: 44GW of renewable assets at different stages of development, 95% of it wind power. </li></ul><ul><li>Waitrose : committed to cutting its CO2 emissions by 10% by 2010, from 2001 levels through a carbon management programme </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul>
  32. 32. Business and Climate Change
  33. 33. Business and Climate Change <ul><li>BUT: These are all big companies. </li></ul><ul><li>&quot;Medium&quot; and &quot;small polluters&quot; for example not done much. </li></ul><ul><li>UK Carbon Reduction Commitment set to change this by 2011. Allowances to be given, then auctioned… </li></ul><ul><li>Other SME's and SME's in other countries doing v little beyond basic environmental compliance. </li></ul><ul><li>Campaigners argue only regulation will work... </li></ul>
  34. 34. Business and Climate Change
  35. 35. Business and Climate Change Buzzwords and what they mean <ul><li>Footprint : &quot;Total set of GHG (greenhouse gas) emissions caused directly and indirectly by an individual, organization, event or product” (UK Carbon Trust 2008) </li></ul><ul><li>Neutrality : &quot;Achieving net zero carbon emissions by balancing a measured amount of carbon released with an equivalent amount sequestered or offset&quot; </li></ul><ul><li>Offsetting : &quot;Financial instrument representing a reduction in greenhouse gas emissions. Offsets are typically generated from emissions-reducing projects&quot; </li></ul>
  36. 36. Business and Climate Change Can we make green cool for consumers?
  37. 37. Business and Climate Change Buzzwords and what they mean <ul><li>Intensity : In companies, increases efficiency per unit or facility but does not limit overall emissions growth of the organisation </li></ul><ul><li>Supply chain emissions : &quot;Emissions generated by indirect associates to the organisation: First, second, third tier suppliers, and that generated by their products&quot; </li></ul><ul><li>Carbon labelling : &quot;Show products' carbon footprint and help people make green shopping decisions&quot; (in theory!) </li></ul>
  38. 38. 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_address] IPCC website UK Government websites: DEFRA, Energy and Climate Change Ministry Greenpeace website Plus many others, just search around….

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