A terrible irony of climate change is that many of the countries that contributed least to the problem will suffer most, in particular through drought, water scarcity, crop failure and forced migration.
All nations bear a responsibility, but the United States and China (as largest historic and largest future emitters) must take the lead. They can set an admirable example for the rest of the world by showing that entrenched positions are no longer an option, and that co-operation across borders is both possible and essential.
From a policy perspective, we need pragmatic solutions underpinned by aggressive and binding commitments for carbon reductions. Engaging with the threat of climate change will require political bravery and visionary thinking. There is no room for interim shortcuts and it is crucial that any stimulus packages with regard to, for example, infrastructure, do not lock us into an unsustainable future.
I would like to see a number of concrete policy outcomes and commitments coming from Copenhagen (COP15) (and beyond). These include:
A proposal that moves towards a global cap and trade framework. Or for fungibility between regional frameworks if the global objective is too hard to achieve in one step.
A proposal that will ultimately include the world’s forests in a global climate protection carbon trading scheme and a supporting policy framework recognizing the importance of forestry and sustainable agricultural/land practices. Emissions from the deforestation of tropical forests contribute some 17 per cent of annual greenhouse gas emissions. Rainforests also sequester almost 20 per cent of man-made CO2 emissions every year in addition to storing water, regulating rainfall, hosting an immensely rich biodiversity and providing income for local communities. Yet deforestation is endemic. Reflecting the carbon embedded in trees and rewarding that will make an enormous change at low financial cost and enormous collateral benefit.
Encouragement of agricultural practices that reduce CO2 (and other greenhouse gases) and encourage the capture of carbon into soil systems.
Recognition of the importance of energy efficiencies and the built environment in fighting climate change. Buildings are responsible for approximately 40 per cent of the world’s current energy use and constitute about a third of our CO2 emissions. At the same time, global population continues to grow, driving urbanization and the need for additional housing stock. The opportunity for cost-effective reduction of carbon emissions related to the built environment through both retrofits and energy-efficient new housing stock is enormous and should be promoted and underpinned by appropriate legislation.
A pragmatic and systemic approach to promote investments into renewable energy and increase the flow of capital to clean and energy-efficient technologies. Businesses will only create jobs for the future, economic growth and fiscal revenue if there is greater certainty around policy and legislation. Ultimately, renewable energy technologies should be cost competitive with carbon hydro intensive technologies. But until scale has been achieved there is a need for feed-in tariffs and enforceable renewables targets for utilities. Similarly, there is a role for governments to participate in large-scale investments into grid parity and smart grids to enable renewable schemes to compete effectively.
Crucially, any delays or remaining areas of uncertainty in the wake of COP15 must not be allowed to deflect us from our responsibilities as individuals and businesses. No-one should be relying on Copenhagen to provide a “magic panacea” and much can be done independently of COP15, ranging from responsible consumerism and community projects, to local legislation and low-carbon initiatives.
Business and geopolitical stability is critical for climate change resolution. For action to be effective engagement needs to happen without reverting to protectionist measures. Consumers and businesses need to become responsible in their choices and large-scale investment (both political and financial) is needed in solutions. It is, however, my firm belief that we can meet the challenges of climate change without compromising on growth and job creation. Let us not forget that, whilst climate change poses an enormous threat, it also presents many opportunities.
Stanley Fink is Chairman of Earth Capital Partners, a commercial investor with a specialist focus on environmental finance.