DEVELOPING A PLAN FOR THE PLANET

A BUSINESS PLAN FOR SUSTAINABLE LIVING

IAN CHAMBERS & JOHN HUMBLE

GOWER        2011

The Green Economics and Sustainable Growth Series

PART 7

Chapter 3: Executive Brief No. 2: Climate Change (Cont)

The role of Government, Business and people

GOVERNMENT

The contribution of government is important at all levels – international, national and state. The EU countries and an increasing number of American states are using a variety of approaches including regulation, legislation, tax and rewards.

v  Lead by example: Although America is the world’s largest producer of greenhouse gases, the dangers were consistently downplayed by the Bush administration. In a fundamental shift of policy the Obama administration, in April 2009, declared greenhouse gases were a threat to public health. The US Environmental Protection Agency (EPA) reported that US citizens, particularly the poor and those in ill health, were vulnerable to an increased risk of droughts and floods; sea level rises; more intense storms and heat waves; and harm to water supplies, agriculture and wildlife. It said that the science on man-made pollution as a cause of global warming is ‘compelling and overwhelming’. Regulations will cover carbon dioxide emissions and five other greenhouse gases. This landmark decision puts the USA in a leadership position on climate warming.

v  Establish clear guidelines: An important role of government is to set a clear statement of objectives, and the economic plans to achieve them. The following letter, written to the UN by a group of top business leaders prior to the Bali Conference in 2008, endorses the need for government action: “It is our view, that a sufficiently ambitious, international and comprehensive, legally binding United Nations agreement to reduce greenhouse gas emissions will provide business with the certainty it needs to scale up global investment in low carbon technologies. We believe that tackling Climate Change is the pro-growth strategy.”

v  Collaboration: In 2009, 75 countries signed a treaty to establish an international organisation – the International Renewable Energy Agency – to promote the use of solar power and other renewable energy sources. It will be a driving force behind renewable energy technologies such as wind, water and geothermal sources, demonstrating ways for countries to reduce their dependency on oil, gas and coal.

v  Legislation: In 2009, the British Parliament passed the Climate Change Bill, the first of its type in the world. Government has committed to reducing carbon emissions by 50% by 2050.

v  Establish a global financial framework: There is already a best practice strategy operating increasingly successfully in areas such as the EU and California – the Cap and Trade system. This is a simple way of creating a predictable environment which identifies clear limits to CO2 emissions for business and individuals (Cap). Businesses that exceed their caps, can purchase ‘offsets’ to compensate, from businesses that overachieve (Trade). The importance of these offsets is that they can also be used to fund projects that support alternative energy production or efficiency such a forestry, wind, hydroelectric and solar power, thus funding the innovation and technology development required to support the overall change. In 2007, the carbon market was valued as $64 billion in carbon credits or ‘offsets’ traded.

v  Reversing deforestation: Another opportunity is reversing deforestation. An estimated 20% of greenhouse gas emissions are from deforestation through the burning of forests with the resulting release of greenhouse gases. In parallel is the loss of the CO2 absorbsion which occurs in forests. International and national government coordination to reduce this deforestation not only contributes to managing Climate Change but also addresses other challenges such as biodiversity and sustainability.

v  Fast-tracking reforestation: A further task for government is in reforestation. There are already best practice programmes operating in China, Africa and Korea where reforestation programs are highly effective. However, the overall global forest loss versus reforestation is still negative. As funds become available from Carbon Offsets programmes there is the opportunity for many wastelands to be converted back to forests.

v  Mitigation policies: Effective mitigation is key in addressing Climate Change. The following table from the UN Environmental Programme outlines some selected policies and measures that can be used to mitigate Climate Change…..

 

CLIMATE CHANGE IN CALIFORNIA

A Strategic Plan

The US Federal Government has for many years neglected the risks and challenges of Climate Change. President Obama in 2009 committed the administration to a new sense of urgency and a series of practical measures, acknowledging the grave nature of the problem.

However, cities and states have meanwhile been proactive. In 2007, the US Conference of Mayors launched the Mayor’s Climate Protection Center to administer and track agreement by the cities to meet the Kyoto Protocol in their own communities and to put pressure on Congress to pass bipartisan greenhouse reduction legislation. There re now 719 signatories to the agreement. Many states have made similar commitments.

California is of special interest. First because it produces 1.4% of the world’s and 6.2% of total US greenhouse gases and therefore has the potential to make a major impact globally. Secondly, because under the leadership of Governor Arnold Schwarzenegger, the state has produced a long-term strategic plan, backed up by legislation and major education campaigns.

Schwarzenegger made it clear when he campaigned for Governor in 2003 that he wanted California to be number one in the fight against global warming – ‘This is something we owe to our children and our grandchildren.’

Every aspect of the problem was studied in depth. For example, the risk of reduced water supply through more severe droughts, more winter flooding and the intrusion of saltwater into coastal aquifers. This could seriously damage agriculture, a $26 billion industry. Climate Change would increase levels of air pollution. Although California has developed one of the largest and most diverse renewable electricity generation industries in the world, less snow pack would reduce levels of hydrogeneration in the summer and fall. The risk of catastrophic forest fires would be increased. Changes in ocean conditions would adversely affect California’s fishing industry. Some of these studies dealt with short-term problems but a long-term strategic view was also necessary.

In 2006, California passed a landmark bill establishing a comprehensive programme of regulatory and market mechanisms to achieve real, cost effective reductions of greenhouse gases. Carbon emissions are to be reduced to 1990 levels by the year 2020, which is a 25% reduction. Emissions will be reduced to 80% below 1990 levels by 2050.

The driving force for implementing this plan is the California Air Resources Board (CARB). An Environmental Justice Advisory Committee and an Economic and Technology Advancement Advisory Committee will advise CARB. These regulatory and legislative programmes have been reinforced by major communication campaigns and consultations so that everyone in the state is aware of the serious nature of the problems and the need for action.

This is an inspirational case where leadership has been translated into a coherent strategic plan backed up by legislation. The immediate challenge facing California is addressing the financial challenges arising from the global credit crunch whilst not weakening the implementation of the Climate Change plan.

BUSINESS

Why is it important that business takes an active part in addressing Climate Change? There are three key reasons: