Burson-Marsteller

Reasons for optimism in 2009

by Bill Royce on 6th January 2009 • The Cast Blog

Sorry if you expected a commentary about economics and finance. I want to talk about a larger issue that’s not the fault of global markets but for which markets are a critical part of the long-term global solution: climate change.

2009 is the crunch year. A post-Kyoto framework must be determined in Copenhagen in December to shape global action beyond 2012. Here’s my take on where we stand as we head into this ‘make or break’ year.

An historical diversion

It is twenty years since, as speechwriter to the (then) Australian Liberal Party leader Andrew Peacock, I researched and wrote my first speech about global warming. I reread this over the holidays, mostly out of morbid curiousity (to see how little we then knew).

1989 was just two years after former Norwegian PM Gro Brundtland, in the UN report Our Common Future, introduced the clumsy concept of sustainable development (in her words, “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”).

1989 was also one year before the Intergovernmental Panel on Climate Change (IPCC, formed in 1988 by the World Meteorological Organisation and UNEP) released its first assessment report on global warming. This led to the Earth Summit in Rio de Janeiro in 1992 and ultimately to the Kyoto Protocol in 1997.

Political speechwriters have considerable flexibility where a public position is needed before the internal policy machinery has done its job. In 1989, not surprisingly, we had no formal party position on global warming. On little more than an informed hunch, we lumped for the precautionary principle: better to accept global warming is real, at least in public, until the science was more certain. It was a pretty fine call heavily influenced by the importance of the environmental lobby in a looming Federal election. Thankfully the speech gave the impression there was more substantial analysis behind our position!

Today’s understanding

In the last 20 years our knowledge of the mechanics of climate change, ‘tipping points’, feedback loops, rainforest and oceanic ‘carbon sinks’, and the fluid dynamics of melting ice shelves has grown steadily more worrying. In particular, the faster-than-expected retreat of glaciers and Arctic ice-caps and the shedding of ice shelves in Antarctica and Greenland have increased the likelihood of near-term rises in sea levels, lower oceanic absorption of CO2, and disruption of the Gulf Stream (which keeps UK and northern European winter temperatures 6-8 degrees warmer than they would otherwise be).

Atmospheric concentrations of CO2-equivalent greenhouse gases (CO2-e) now stand at 380 parts per million (ppm) compared to 280 ppm at the start of the industrial revolution – and 180 ppm during the last ice age. The bulk of that increase has happened in the last 30-50 years. A “business as usual” scenario would see this rise to 800-1000 ppm by 2100 with average global temperature 5-6 degrees higher and sea levels up to 4 metres higher than pre-industrial times (worse case scenarios predict 14 metres).

The projected level at which CO2-e needs to be stabilised to avoid the worst effects of climate change has been ratcheted down with each IPCC report, based on improved data. Within the last decade the ‘official’ targets have been reduced from 550 to 450 ppm – with the ‘deadlines’ similarly falling from around 2050 to 2030 to 2020. The leading climatologists are even now talking of targets at or below 400 ppm – and some as low as 350 ppm (30 ppm lower than today’s atmospheric concentration).

Early climate change is already visible. Polar bears stranded on melting ice. Prolonged drought in Australia. Extreme weather in the Gulf of Mexico and elsewhere. Coral bleaching. Declining populations of bees, upon which all agriculture and horticulture depends. The growing proportion of our oceans regarded as ‘dead’.

James Lovelock, who created the Gaia Theory underpinning most climate science today, believes humankind will respond effectively only when climate change becomes an immediate threat to survival. The evidence is mounting that this day is closer than we would like.

Positive energy for 2009

There are six key reasons to believe that the world will secure a meaningful deal in 2009, and start a serious programme with the aim of avoiding dangerous climate change. Some effects are already irreversible, but still (it is believed) manageable. What is now hoped is that we can avoid changes which threaten human civilisation.

1. Scientific consensus. When Kyoto was forced through in 1997, there was still room for legitimate differences of scientific opinion about the reality of global warming. Today the growing weight of evidence has confirmed the worst suspicions and silenced all but the most defiant of the critics and sceptics. When the IPCC has conclusions with a 90% confidence level, it’s hard even for industry-funded academics like Fred Singer and Bjorn Lomborg to credibly dismiss global warming – perhaps one reason why ExxonMobil has agreed to switch its climate investments from nay-saying think tanks to long-term R&D partnerships on mitigation and adaption solutions.
2. Inter-governmental cooperation. Slowly, the political leadership in Australia, the US, China and many other countries that were resistant or reluctant to fully embrace Kyoto have come on board for a comprehensive global plan backed by disciplined local action. There is also a growing consensus about the broad shape of a decarbonised future, including the embrace of carbon capture and storage (CCS) technology as one of the few near-term solutions while transformational technologies – including hydrogen fuels – are proven and deployed commercially in coming decades. Sure, there will still be political choices in play country by country – whether to go nuclear, where to allow wind farms, whether to subsidise solar or mandate clean-coal technology – but it is safe to say that there is now a minimum common pathway. Moreover, some of the Middle East nations which have grown wealthy on the back of oil and gas resources are leading the way in investing substantial sums in finding global solutions to climate change; for example, Abu Dhabi’s ambitious Masdar initiative.
3. Obama. While it’s foolish to overstate the significance of one man, nothing is more positive than the election in the US of a true believer in the science of climate change with a thoughtful plan for a different energy future. As I said when introducing former Friends of the Earth international co-chair Tony Juniper at a client function in London in mid-November, Obama’s election was really about two colours: black and green. UK officials have been confident for some time that Copenhagen would find a way to bring the US inside the tent, but now it is almost certain that this will be based on commitment rather than compromise. There is great promise in the stellar team that Obama has chosen for energy and environmental leadership. Energy Secretary Steven Chu, one of three scientists who shared the Nobel Prize for Physics in 1997, is a strong advocate of alternative energy; EPA administrator Lisa Jackson previously worked for the federal agency for 16 years and is a former New Jersey Department of Environmental Protection commissioner; Carol Browner, who was EPA head under Bill Clinton and serves on the board of several environmental NGOs, will head the White House energy team; Nancy Sutley, a former EPA official and currently LA’s deputy mayor for energy and environment, will lead the White House Council on Environmental Quality; and Harvard physicist John Holdren, one of the world’s leading climate change experts, will be director of the White House Office of Science and Technology. This is a clear signal that Obama is serious about a decisive break in the US’s position on global warming and determined national and local action to change direction.
4. Hard yards on thorny issues. Deforestation has been one of the more problematic issues in climate change negotiations. It has been difficult for the developed West, which has destroyed much of its original forests, to demand that Indonesia and Brazil (among others) stop turning their tropical rainforests (vital carbon ‘sinks’ for the world) into productive land for forestry or agriculture. No deal on this could be reached at Kyoto, but at the Bali UNFCCC meeting in 2007 there was support for a World Bank initiative (driven by the developing nations) that would financially reward nations that preserve their rainforests from further development. The initial offer of $300 million may not be enough, but there is a lot of work behind the scenes to finalise the criteria for this fund including agreed procedures for monitoring, notification and compliance. Reaching agreement in Copenhagen to halt further destruction of these global ‘air conditioning’ systems will be an historic breakthrough.
5. Legislating for accountability. There are limits to what can be achieved by passing a law, and it’s hard to know how laws will be enforced when drawn into courts, but it is undoubtedly positive that hard targets are being legislated. The UK now has a legally binding target of an 80% reduction in emissions by 2050. The European Union has adopted a binding target of a 20% reduction by 2020 with 20% of its energy coming from renewables – with an offer to increase the emissions reduction target to 30% if an international agreement is reached in Copenhagen. Obama has similarly embraced an 80% cut by 2050 and this is expected to feature in an energy and climate plan produced in his first 100 days. Other nations will follow. What comes next will not be easy, but this will wonderfully focus minds on concrete solutions and early wins. Sadly, it will probably also generate a fortune for lawyers with NGO clients, as they use these laws to challenge government decisions such as approving new coal-fired power stations or new leases for oil exploration.
6. A new energy infrastructure. In December we took our children to Finnish Lappland to see Santa’s workshop, staying in a log cabin in the far northern village of Yläss. Here in almost pristine Arctic wilderness, where it was minus 25 degrees and a 20-minute “sludge” by foot to the only supermarket in town, every cabin (and every parking space in the local hotel) had what first looked like a parking meter. On closer inspection, it turned out to be a power unit where people could plug in electric hybrid cars to recharge overnight. This is a very powerful example of an advanced nation investing now to anticipate and accelerate the transition to a new energy economy. If an intelligent and innovative country like Finland is taking a lead on something so simple, when more than 80% of its electricity already comes from low-carbon energies (including hydro and nuclear), it gives me confidence that enlightened national self-interest will foster a much-needed spirit of climate altruism.

So they are six reasons to be hopeful for 2009. It won’t all be good news on the climate front: both the financial meltdown and the slump in oil prices will undermine renewable developments and VC investors are in temporary retreat from green tech R&D start-ups. There is also no shortage of scientists who believe the problem now needs more radical solutions. But as we look down the road to Copenhagen there are more green lights than amber or red – and that’s a good reason for quiet optimism.

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