An audio version of this episode was published on 11th December 2015 and is available at www.susbiz.biz
This week the Energy Minister and the Prime Minister have been under fire as COP21 moves forward. While the main negotiating sessions continue, many other meetings take place as well. Mark Carney of the Bank of England has a view. The group of 77 nations (G77) plus China has a view as well, and so do the 48 Least-Developed Countries. Caroline Lucas of the Green Party is concerned. Can we standardise climate change? Is emissions trading the answer? George Monbiot believes that that's attacking the problem from the wrong end. Jeremy Leggett is not at all happy with Minister Amber Rudd as you will learn from the latest chapter of his book, and the week will end with a massive march through the streets of Paris. I’m a member of iema and that entitles me to a daily update on the conference from the environmentalist magazine. Non-members can subscribe at environmentalistonline.com. But we have our own man on the spot in Paris. You’ll hear from Richard Lane later on.
First of all: it’s beginning look a bit like - 99p for a litre of petrol by Christmas. The oil price has fallen 60% since summer 2014 and Goldman Sachs are still predicting the $20 barrel. This week Brent crude was at $42 and West Texas Intermediate down to $38. Since 2011 the Chancellor has suspended the fuel price escalator. In the face of falling oil prices an additional 1p on a litre of petrol or diesel would be pretty painless. But the government estimates that freezing the escalator has reduced taxation income by some £23bn over the life of the last Parliament. Isn’t that approximately twice what the Chancellor intends to take out of the welfare budget? You can make up your own mind as to whether this was the right place make cuts.
The Prime Minister and cabinet members have been criticised this week for flying to the Paris climate change talks, rather than taking the more environmentally friendly Eurostar train. David Cameron and Energy and Climate Change Secretary Amber Rudd flew the short trip to the opening day of the talks last Monday. International Development Secretary Justine Greening and her team also took a flight for her short trip to the COP21 talks on Saturday
According to Eurostar, a short haul return flight from Heathrow to Charles de Gaulle airport emits 122 kilograms of CO2 per person, compared with the 10.9 kg CO2 emitted per Eurostar passenger travelling from St Pancras to the centre of Paris. On such a short journey, city centre to city centre times are likely to be shorter by train than by air. Most of the team went back by train, so perhaps the criticism worked.
According to Independent Catholic News, Catholic campaigners have called on the UK government to heed the message of Pope Francis as the Secretary of State arrives in Paris to join the second week of the climate talks.
"David Cameron's speech last Monday,” they say, “called for a strong deal that guarantees adequate climate finance for the world's most vulnerable people and a five year review mechanism to measure and improve progress. We look forward to Amber Rudd rolling her sleeves up and getting involved to make this deal happen."
And Caroline Lucas of the Green Party has a message for Amber Rudd as well. Her open letter to the minister starts like this:
“HUMAN RIGHTS AND GENDER EQUALITY IN THE PARIS AGREEMENT ON CLIMATE CHANGE
“I am writing to express my concern regarding reports from the COP21 negotiations that the language on respect for human rights and gender equality is at risk of being removed entirely from the operative section of the Paris Agreement. Climate change represents a gross social injustice, and establishing overarching principles of climate justice, human rights and gender equality at the heart of the climate agreement will be a prerequisite for effective climate action. I urge you to ensure that the UK in particular is playing a constructive role in upholding a strong EU position on this issue.”
Paul Polman, chief executive of Unilever, aims to make the company "carbon positive" by 2030, using only renewable energy. He didn’t mention Amber Rudd. Well, not directly.
Speaking to BBC News this week he said he was concerned that the government's decision to remove financial support for wind and solar power would send the wrong signal. Subsidies cannot be permanent, but equally they should not be withdrawn at short notice. There is a risk that cutting subsidies sends the wrong message to investors, who are looking for stability. The government has been inconsistent.
“We deal with 2bn consumers every day,” says Polman. “No government deals with 2bn consumers. If we are all to achieve our targets, government and business must work together.”
It seems pretty clear that without private sector support, governments will struggle.
So what’s been happening in Paris? Apart from the governmental negotiations there are many other organisations which have come to Paris to lobby and discuss climate change. A great deal has happened. For example,
Ninety businesses and 19 governments have signed up to a World Bank coalition to support the introduction of carbon prices. BT Group, EDF, Lafarge, Nestlé, SSE, Unilever and Veolia are among the companies joining the coalition, which will collect and share best practice, mobilise business support and convene talks with global leaders to overcome barriers to more widespread use of carbon pricing.
They are backed by the governments of Sweden, the Netherlands, Ethiopia and Mexico, among others. Canadian environment minister Catherine McKenna announced that the country’s government, elected last month, would support the coalition.
World Bank president Jim Yong Kim pointed to China’s plans to introduce a carbon price in 2017, and said: “Anyone who wants to do business with China will have to change the way they work.”
According to the Financial Times, the preferred solution is a cap and trade system. Such schemes already exist. EU ETS, the European union emissions trading scheme, is an example. Unfortunately, it's a bad example because it has done nothing to reduce carbon emissions. Cap and trade involves governments issuing carbon credits which are effectively a licence to emit carbon dioxide. The idea is that the cost of extra credits will put a burden on old and dirty plants, reduce their viability and lead them to be phased out. More efficient plants will need less credits and may even have a surplus to sell, giving them a financial and competitive advantage. In practice, EU ETS has been subject to fraud and manipulation. The price of carbon credits, which has collapsed to less than €4 per tonne, provides little incentive to industry to clean up.
This week the International Standards Organisation (ISO) and the Greenhouse Gas Management Institute (GHGMI) held a panel discussion on the sidelines of the Paris talks.
Tom Bauman, co-founder of the GHGMI and chair of a technical committee working on climate change mitigation and adaptation standards at the ISO, said that it had received a large number of requests over the past 18 months for new climate change standards.
Nick Blyth, policy and practice lead at IEMA, said that the demand for new standards was driven partly by a general increase in awareness of the impacts of climate change as well as the publication of the revised ISO 14001 environmental management standard. The revised 14001: 2015 standard requires organisations to consider the impact of the environment, including climate change, on their operations as well as their impact on the environment.
“The revised ISO 14001 should introduce more people to climate change, which will then lead them into the scope of other GHG standards,” he said.
More than 324,000 organisations worldwide were certified to 14001 in 2014, according to the ISO’s latest figures. The high rate of use is bringing climate change into mainstream environmental management systems, Blyth added.
The negotiations are not all about mitigation; measures to reduce or slow down climate change. They are also about dealing with the consequences. Discussions over which countries will pay for damage caused by climate change are slowing down negotiations, with the G77 plus China group issuing a new warning that the issue threatens chances of a deal.
The G77 plus China negotiating bloc, which now consists of 134 countries, including Saudi Arabia and South Africa, complained about attempts by developed countries to widen the pool of donor nations that would contribute finance. The developed nations argue that developing countries “in a position to do so” should also contribute to funds to pay for climate change damage.
In a strongly worded statement, ambassador Nozipho Mxakato-Diseko of South Africa, which chairs the bloc, said: “The G77 and China is deeply concerned with the attempts to introduce economic conditions in the finance section currently under negotiation … Any attempt to replace the core obligation of developed countries to provide financial support to developing countries with a number of arbitrarily identified economic conditions is a violation of the rules-based multilateral process and threatens an outcome here in Paris.”
Countries most at risk from climate change joined the debate and warned that there would be no overall agreement in Paris unless a mechanism to deal with the impacts of climate change beyond adaptation is agreed.
The Least Developed Countries (LDC) negotiating bloc comprises 48 of the world’s poorest countries including many African countries and low-lying island states. Its members face severe disasters from climate change that are predicted to cause damage for which adaptation will not be possible. This is known as “loss and damage” and includes salination of agricultural land and loss of land to the sea.
Pa Ousman Jarju, minister of environment and climate change for the Gambia, said: “We do not foresee an outcome in Paris without loss and damage. It is a red line for us.”
Jarju said that the bloc had been encouraged by some of the statements by world leaders made at the start of the Paris talks, but said that this had not filtered through to negotiations. “We have seen a lot of bracketing,” he said, referring to the practice of using square brackets throughout the draft text to indicate options on the table where no decision has been reached. More about this in a moment.
Last Friday, Mark Carney, Governor of the Bank of England, launched the Task Force on Climate-related Financial Disclosures (TCFD) to develop voluntary, consistent climate-related financial risk disclosures by companies. This would provide lenders, insurers, investors and other stakeholders with important long-term information, he said. Carney has already warned about the danger from stranded assets, fossil fuel reserves which cannot be exploited without emitting unsustainable levels of emissions and which are therefore potentially worthless.
The taskforce will be chaired by UN special envoy for climate change and former mayor of New York Michael Bloomberg. It will consider what constitutes effective corporate financial transparency on climate change to understand the physical, liability and transition risks, and will review and learn from existing disclosure processes.
Paul Simpson, chief executive of the CDP, (formerly the Carbon Disclosure Project), which has been working on climate change-related disclosures for investors for 15 years, welcomed the announcement. “We see it as a way of elevating our work and some of the information we collect right into the heart of financial markets and central banks. Carney is governor of the Bank of England and chair of the Financial Stability Board so that’s a much stronger angle into banks on climate than there’s been before. It will take disclosures to the next level,” he said.
Proposals by the Treasury to scrap regulations requiring companies to report greenhouse-gas emissions in their financial reports as part of its business energy efficiency tax review were very worrying, Simpson said. But these could now be under review following Carney’s high-profile speech to the city and the creation of the taskforce, he added.
“We very much hope that due to Carney’s focus on this issue, Osborne and the Treasury will see sense and realise that investors need this information, in fact they need more information than just GHG emissions. We’re hopeful that it will cause a u-turn from Osborne.”
Not another u-turn, surely.
More than 100 companies including Ikea, Coca-Cola, Walmart and Kellogg have pledged to set emissions reduction targets in line with scientific assessments on how to keep temperature rises below 2°C.
Corporate science-based targets are being advocated by a coalition consisting of the World Resources Institute (WRI), the CDP, the UN Global Compact and WWF.
Speaking at a side-event on science-based targets at the UNFCCC talks in Paris, Kevin Moss, business centre director at the WRI, said typically, companies would set emission reduction targets in line with what they thought they could achieve, and then stretched themselves slightly so they knew they would meet the target.
“Science-based targets start with the principle that what we are trying to do is solve the problem of catastrophic climate change and there isn’t really a half way point to avoiding catastrophic climate change, you’re either on a trajectory to meet it or you’re not.
“If you’re making the effort to reduce emissions, it’s worth making that little bit extra effort to avoid catastrophic climate change,” he said.
A new draft agreement was announced at COP21 this week. I heard that the previous 50 pages had been reduced to 20. The copy I downloaded ran to 48 pages - still full of bracketed alternatives. For example:
. Article 2bis (GENERAL)
1. [All Parties [shall] regularly prepare, communicate [and implement] [intended] nationally determined [contributions][components] [on [mitigation] and adaptation]…
…you get the idea. And that’s just one clause. Still plenty to do before the close of business on 11th December. And I think it will take a long time to understand what the final agreement actually amounts to.
George Monbiot is a climate campaigner, a Guardian columnist and author. Last Friday he appeared on Any Questions, the BBC Radio 4 current affairs debate. He stated that the UK has a legal requirement to exploit fossil fuels, which seems totally at variance with managing emissions. I tracked this down to an article he wrote in January, referring to what is now the Infrastructure Act 2015. Article 41 of this Act is indeed headed “Maximising recovery of UK petroleum” and it requires the Secretary of State to produce one or more strategies for enabling that objective to be met. That’s the same secretary of state who is responsible for reducing carbon emissions. Also in the article, George Monbiot takes issue with the idea of reducing carbon emissions by penalising the consumer. Instead we should tax the producer of fossil fuels. In his words, “Let’s control carbon emissions at the wellhead, not the tailpipe.” Whether that will happen in Paris is open to question. For the moment a carbon cap and trade scheme seems more likely, with all its shortcomings.
I suggested last week that the US would resist any agreement that was legally binding. The good news is that President Obama said he would accept a legal obligation to review the progress towards carbon reduction every 5 years. That’s a start, but in my view reviews should begin much sooner and be more frequent. On the other hand, the Indian Environment Minister said that his country was embarking on a 10-year project and there would clearly be no need for review for 10 years. What business could set out on a 10-year plan without review? If there are any you’ve probably never heard of them because they failed in the first few years.
The latest episode of Jeremy Leggett’s book “The Winning of the Carbon War” came out this week. It’s a free download from jeremyleggett.net. It’s nearly finished. The last chapter will be out in January and will end with an assessment of what was achieved by COP21. Jeremy leads one of the original and biggest solar energy companies in the UK. He is has it in for Amber Rudd as well. Here’s a quotation from his latest chapter.
“The government is engaged in a scorched earth assault on solar now, it seems. They want no opposition to gas and oil, fracked from British shale or otherwise produced at home and abroad. They seem unembarrassable by their willingness to shovel large subsidies to shale and nuclear while torpedoing solar subsidies.
“Two days ago somebody in either the civil service or the Tory party leaked a letter from Amber Rudd to ministerial colleagues. It shows that in June, when she insisted that the UK was on track for its legally binding European commitment for renewables in the energy mix, she misled Parliament. Now she admits that the government is on course to miss the target by some distance. She suggests some shameful ways of wriggling out of the commitment, like somehow creating renewable energy credits abroad so as to claim the targets have been met.
“Today, facing calls for her resignation, she has given an interview insisting that she still has the confidence of the renewables sector. I know of no leader in the renewable sector whose view deviates much from derision. The whole spectacle has descended beyond farce.”
Well, all this is politics, horse-trading and shenanigans. Does it really matter to you, me and the man in the street what goes on in Whitehall or what gets decided in Paris? Yes, it does. Is there anything we can do about it? It’s the difference between mitigation and adaptation. Governments and global corporations can mitigate. You and I have to adapt. Having said that there are many brave people in Paris running parallel events and demonstrating their demands for a fair and effective agreement from COP21. The short-term interests of the less-than-1% cannot determine the futures of the rest of the world, they say. Next Saturday, 12th December, they take to the streets of Paris to demand that all countries should keep to the pledges made at COP21 and ideally do even better. No, I won’t be there. No excuses and I’ll probably regret it. It’s going to be part of history. I’ll be there in spirit.
One person who is there is Richard Lane, President of York Community Energy. Here’s his report:
"Basically: almost everything we're doing is wrong! The Clean Development Mechanism and the Green Climate Fund are both deeply suspect and causing the sort of popular resistance that we have seen when huge windfarms get imposed on people without their consent in the UK. The draft text of the Paris agreement only mentions the word "energy" once - that's in the phrase "International Atomic Energy Agency". The US has been fighting against the inclusion of a clause referring to the "loss and damage" due to climate change (which would of course signify the recognition of responsibility), but more recently has given way on this issue provided it is made clear that there will be no means to make them liable for any sort of reparation. The South African spokesperson of the G77 has been very outspoken, resulting in a lot of behind-the-scenes threats and pressure being applied to other G77 members to rein her in. At the moment it looks like this approach is being successful in breaking up the unity of developing countries.
"A new version of the text will be released on Wednesday 9th December. There is still hope that the final target could be 1.5degC but there is no hope of a legally binding treaty - or indeed any updating of INDCs that would get us closer to that from the current 3degC or so.
"I actually missed the daily debrief today because I was due to videocall in to the York Environment Forum meeting which nearly didn't work due to a combination of technical problems & lack of skill their end and difficult environment my end.
"I met a lot of activists in community energy - there are moves to try to connect up the community energy movement worldwide.”
More from Richard, I hope, later in the week.
Meanwhile, back at work, back in the office, are you confident of the future, or do you have a 10-year plan which means you don’t have to worry about anything for another 9 years or so? If you want a review before then, if you want to chat about sustaining your business and bolstering your competitive position for even more than the next 10 years, give me a call, especially if you’ve still got some mince pies left.
I’m Anthony Day and I’m on 07803 616877.
That was the Sustainable Futures Report. This is Anthony Day. There will be another episode next week.