01 Oct 2014
There was a huge amount for political analysts to comment on in David Cameron's barn-storming conference speech: the promise of tax cuts and the mystery of how they will be paid for; the vague vow to tackle free movement of people within the EU; the passionate and tearful defence of his commitment to the NHS; the laser-guided attacks on Ed Miliband's character and credibility. But there was next to nothing on the issue Cameron last week described as "one of the most serious threats facing our world": climate change.
There was one throw-away line, when he declared towards the end of the speech that the UK was "leading, not following, on climate change". But a week on from his commitment to drive more climate action and a year on from the political row over energy bills there was nothing on flooding, nothing on fracking, nothing on renewables, and nothing on nuclear.
Still, we like a challenge at BusinessGreen, and it is just about possible to analyse a rhetorical absence, so here goes.
The first thing to say is that conference speeches do matter. They may be ignored by most people, they may rarely, if ever, swing elections, and they may have little to do with the day-to-day business of governing. But they are the closest thing we have in the UK to a State of the Union address and as such they give the main political leaders a chance to set out their priorities and vision in a way they are rarely afforded.
Within that context there are two ways to interpret Cameron's glossing over of climate, environmental and energy issues, neither of which are great for the green economy, but one of which is much better than the other.
The first is the knee-jerk condemnation that the green NGOs are this afternoon indulging in. "How can the Prime Minister highlight climate risks one week and ignore them the next," they cry. "How can he ditch green building standards as soon as he thinks it may buy him a few votes," they lament. "How can we take seriously a man who wilfully ignores an issue that once defined his political character," they ask. The charge being laid at Cameron's door is one of political hypocrisy and no little cowardice - the green groups' outrage is understandable, if predictable. They feel they have been betrayed by a Prime Minister who promised a new kind of environmental action, and they have plenty of evidence to feed their grievances.
Alongside these NGO attacks come serious questions from green business leaders about those issues Cameron did see fit to address. What will be cut to pay for tax cuts that look distinctly uncosted? How will you keep increasing flood defences and support emerging clean technologies while cutting taxes, cutting the deficit and ring-fencing the NHS? How are offshore wind and nuclear developers expected to cope if the required skills aren't available in the UK and free movement of workers in the EU is restricted?
All of these questions are justified and it is concerning that the Prime Minister does not currently appear to have an answer to any of them. More damaging still for the green economy is the sense of priorities that Cameron has allowed to develop. If you say that you want to prioritise climate action, you actually have to prioritise climate action, not signal that it is way down the list of things you want to do with a second term.
The more nuanced and generous way of interpreting the speech is that Cameron still cares - some would say cares deeply - about climate change and the green economy, but he has an election to win and a party to keep in line so now is not the time to admit it remains a priority.
The fingerprints of Tory election strategist Lynton Crosby were all over Cameron's speech, providing an oratorical embodiment of his reported instruction to "get the barnacles off the boat" - itself a reference to the West Wing episode where President Bartlett's election guru implores him to stick exclusively to vote-winning issues. Consequently, the focus was on tax cuts and leadership credibility, not energy efficiency and climate risks.
Cameron signalled with his speech on climate change last week and his brief mention of it today that the environment is still part of his political identity. It is just that he knows it is not a vote winner for the Conservatives and could end up being a vote loser, so he hopes the issue goes away until after polling day. In this respect, he will be delighted that his backbenchers managed to not make a massive fuss about climate science and wind turbines this week, just as he will have been delighted that Labour attacks on his failing energy efficiency policies and contradictory championing of both oil and gas exploration and climate action are yet to cut through. He will also hope that green business leaders will be won over by the promise of low corporate tax rates and the Tories' ‘long term economic plan', while accepting his whispered assurances that a Conservative government would focus on continued decarbonisation.
There is some good news to be had for green businesses in this interpretation of the speech. The climate sceptic awkward squad were notably quiet in Birmingham, suggesting Cameron may yet be able to pull off his softly-softly approach to green growth. Equally, the all of the above energy and transport strategy George Osborne is pursuing does leave some room for renewables, nuclear power, and rail, even if it also allows for fracking and runways. It is a bit depressing when not getting publicly attacked represents a victory for the green economy, but that is the current state of right wing politics on the environment.
However, while Cameron's approach is politically understandable, it presents a serious challenge for the green economy and, as with his promised tax cuts, it requires a huge amount of trust to be invested in a Prime Minister who has offered more 180 degree turns than an episode of Strictly Come Dancing.
As I argued earlier this week, the main problem created by Cameron's climate silence is that it has resulted in a confused policy where the Conservative's climate strategy should sit. Unless some serious thinking is underway behind the scenes the Conservative Party is currently on track to go into an election with a mix of contradictory energy and environment policies that fall well short of the bar set by Cameron when he says the UK will "lead" on climate action. As the Guardian's Damian Carrington argued today, there was scant evidence in Birmingham that this thinking is taking place.
Yes, green businesses may benefit from the policy stability that comes with the suggestion that the Conservatives would largely continue with the low carbon policies that are already in place - electricity market reform, the Green Deal, support for electric car, etc. But a number of these policies are in serious trouble already and the unrelenting nature of the climate change challenge means that resting on laurels is not an option. Even if power sector decarbonisation policies work, and that is a big if, what of green transport strategy, green industrial strategy, green technology strategy?
The other big problem is that presented by the party Cameron will one day - potentially one day soon - leave behind. The decision to quit fighting the climate reckless elements of his party and the failure to build a coherent Conservative climate strategy has only served to embolden those who would happily tear up the Climate Change Act and join the coal industry in celebrating. The net result is that those jostling to replace Cameron either have very little to say on climate change or appear actively hostile to climate action. Regardless of what happens at the next election, there is now a huge amount of political and policy risk that green investors have to factor into their decisions.
Over the next six months David Cameron will make much of his leadership skills, and there is no doubt that today's speech was a shining example of his political clout. But genuinely strong leaders find a way to prioritise the issues they care most about, they find a way to deliver hard truths, and most of all, they have a compelling and coherent strategy that people are willing to follow. On climate change, the green economy, and the wider environment, Cameron's leadership is starting to look distinctly lacking.
Cameron did not forget the green bit of his speech; for political reasons it was never going to appear - and that silence speaks volumes.
Speaking at the UN in New York last week, David Cameron unequivocally described climate change as "one of the most serious threats facing our world", pledged the UK would play a central role in leading the global response, and sketched out a centre right vision for decarbonisation based on free trade and clean technology. Despite all the criticism the Prime Minister has faced from green groups, this short speech was of a piece with all of Cameron's previous public pronouncements on climate change, which ever since he first hugged that husky have always sought to highlight the urgent need to cut greenhouse emissions and build a low carbon economy.
Speaking at the Conservative Party Conference in Birmingham this week, George Osborne unequivocally declared that the UK's future prosperity depended on its ability to urgently deliver both high and low carbon infrastructure. Climate change, the issue his boss believes poses one of the biggest threats to the UK's long term economic security, did not receive so much as a cursory mention.
Unlike Cameron, the Chancellor's stance on climate change and the green economy is not of a piece with his previous pronouncements. Prior to the 2010 election he gave a series of speeches in which he repeatedly declared that if he became Chancellor, "the Treasury will become a green ally, not a foe". But since then every conference speech and budget Osborne has given has either relegated climate change and environmental issues to the sidelines or sought to triangulate an existential challenge into a bout of political dog whistling, promising some support for renewables while also hymning the potential of fossil fuels and sniping at green regulations. Today's speech somehow managed to do both.
Osborne may have mentioned the need to build new nuclear plants and renewables capacity, but look at the order he opted for in his section on the new infrastructure the UK needs. There is a reason why runways and shale gas came before nuclear and renewables, just as there is a reason that climate change and carbon targets were ignored. His infrastructure priorities could not be clearer.
The question for green businesses and investors as they prepare for an agonisingly close general election and the inevitable policy shake-up it brings is who speaks for the Conservative Party on environmental issues?
A Prime Minister who has asserted that he wants to prioritise climate action? Or a Chancellor who would frack under a runway if he could? A new Environment Secretary in Liz Truss who this morning was evidently proud of the fact the UK is "leading international efforts to tackle climate change"? Or an old Environment Secretary in Owen Paterson who this weekend was telling a fringe meeting of his battles with the "Green Blob" and arguing that with climate change "the measures we are taking to counter projected dangers may actually be causing more damage now than those dangers"?
The deep split within the Conservative Party on climate change and the green economy has been an open secret for years, but as a looming election approaches the confusion and inconsistency these divisions create are becoming ever more serious.
The contradictions are too numerous to mention, but here are just a few. The Conservative leadership says it wants to focus on delivering decarbonisation at least cost, but has watered down energy efficiency programmes that promise one of the most cost effective routes to cutting carbon emissions. The party is concerned about high energy bills, but wants to halt the development of relatively low cost onshore wind farms and instead focus on more costly offshore projects. Osborne has reportedly opposed calls for a decarbonisation target for the power sector, but the leadership is still yet to explain how carbon targets it currently remains committed to under the Climate Change Act will be met by 2030 if the power sector is not decarbonised. Communities Secretary Eric Pickles remains nominally committed to localism, except when local planners support new onshore wind farms or oppose fracking projects, in which case he moves to change planning rules or reverse local decisions. Flood defence spending gets cut by the Treasury, until it rains, when it gets increased just enough to meet the politically convenient but scientifically irrelevant point at which Ministers can claim it has been increased against the last parliament. And David Cameron wants to prioritise action on climate change one day and then tear up rules on building energy efficiency the next.
These tensions and contradictions would amount to nothing more than yet another bout of CCHQ in-fighting, were it not for the fact that the policy confusion it is creating presents a serious challenge to the UK's fast-growing green economy. The current Conservative Party position on climate change and the green economy appears to amount to support for the Climate Change Act and over-arching attempts to cut emissions, coupled with hostility towards many of the policies designed to help the UK meet those targets and vocal cheerleading for more fossil fuel exploration. It promises support for favoured clean tech sectors, such as electric cars, graphene, and nuclear, and public condemnation of less favoured sectors, such as wind, solar, and energy efficiency. It asserts that climate change is a serious threat to the UK, but deliberately fuels the impression that the next leader of the party, whoever that may be, would happily torch Cameron's entire green agenda. Above all this disarray sits Cameron himself, asserting that climate action is essential but refusing to provide a coherent vision on how to deliver the scale of action that he acknowledges is necessary.
In short, it is an almighty mess. And the most frustrating thing of all is that it does not have to be this way. It is perfectly possible to offer a compelling centre-right vision for tackling climate change. Indeed, Osborne almost managed it himself, even as he wilfully ignored climate change itself. In making the case for new infrastructure and disruptive technology the Chancellor could have been making the case for decarbonisation, if only he'd ditched the sections on runways and fracking and more explicitly demonstrated how his "pro-business" agenda would aid the green businesses of the future. Throw in some ambitious new policies on resource and energy efficiency as well as clean tech R&D and you've got the basis of a credible centre right pitch for a greener, more competitive, and more livable economy.
Having last week publicly declared the need to prioritise climate action, Cameron has a moral and political obligation to this week explain how and why he will lead the UK's response to this global challenge. The only reason for not providing more detail on how he plans to build on this government's green achievements (and there have been some) was evident in the silence that greeted Liz Truss' two mentions of climate change in an otherwise crowd-pleasing speech to the Tory faithful. But a political leader with the courage of his convictions would face down the UKIP-flirting elements of his party on this most important of issues and would finally deliver the coherent green vision that the Conservative offer to the country currently lacks.
As Matthew D'Ancona observed at the height of this year's floods (and I make no apologies for quoting this line yet again), "if the PM truly believes that anthropogenic global warming is responsible for potentially catastrophic changes in the weather - then it ought, logically, to be his priority, more important even than economic recovery. One cannot be 'pragmatic' or 'in favour of sensible compromise' about a threat to the survival of the human race".
Currently, the offer to the green business community at the next election amounts to the Green Party and the Lib Dems neck and neck on six per cent of the vote in the latest polls; an increasingly credible green vision and package of policies from Labour that is being seriously undermined by wider questions about the party's economic and business credibility that even Ed Miliband's biggest fan would be hard-pressed to argue he addressed last week; and a contradictory mix of Conservative environmental policies that are further confused by a combination of warm words on climate action and naked hostility to the so-called "green blob".
If Cameron is serious about remaining as Prime Minister for a second term then he must use his final conference speech before the election to explain once and for all how a Conservative government would respond to "one of the most serious threats facing our world". Such a declaration may be met with stony silence by some of the Tory faithful, but many business leaders and entrepreneurs across the UK would be cheering him on.
What a week. So far we've seen over 300,000 people march through the streets of New York demanding climate action, and straining for a glimpse of Leonardo DiCaprio's new beard. Barack Obama and John Kerry have declared climate change is as big a threat as terrorism, and hardly anyone has protested at their sense of priorities. David Cameron has asserted climate change is one of the biggest threats the world faces, and confirmed he wants the EU to cut emissions by at least 40 per cent. China's Zhang Gaoli has pledged that the superpower will cut emissions "as soon as possible", and for the first time promised funding to help poorer nations cope with climate impacts. Francois Hollande has promised $1bn of climate funding and pledged to make development central to any Paris climate treaty. And governments and businesses have signed a new commitment to end deforestation by 2030. Meanwhile, back in Manchester, Labour leader Ed Miliband declared there was "no more important issue" than climate change, and unveiled ambitious new energy efficiency proposals.
And that is just the politicians. Business leaders have got in on the act too, the Rockefellers leading the way with their eye-catching commitment to divest from fossil fuels. Institutional investors boasting trillions of dollars in assets have demanded more ambitious action on climate change, as the World Bank has pulled together a raft of businesses and governments that want to see more carbon pricing. Unilever and a host of other consumer goods firms have made fresh forestry commitments. Barclays has promised to invest £1bn in green bonds, as Masdar has announced more than £500m investment in the UK offshore wind sector. And Google has cut ties with a right wing lobby group because it is sick of its "lies" about climate change.
All that, and it is only Wednesday.
Cynics may argue that we've seen this all before. Political and business leaders jet in for a day or two of mutual back-slapping and carbon intensive steak dinners, pledge to take bold steps to tackle climate change, and then jet out as fast as they can to return to business-as-usual. "Just remember Copenhagen," veteran campaigners counsel with a weary sigh. These observers have a valid point and it was entirely appropriate the UN summit closed with Nelson Mandela's widow Graça Machel warning the assembled world leaders that their celebrations were premature. "There's a huge mismatch between the magnitude of the challenge and the response we heard here today," she said. Amen to that.
And yet, there are four important reasons why the speeches and commitments made in the last few days mark a significant step in the right direction for global efforts to tackle climate change.
Firstly, yesterday proved the consensus in favour of global decarbonisation and the prioritisation of climate action has never been stronger. When Obama says climate change is the biggest long term threat the world faces, when Cameron declares that we 'must' have a global climate deal, when Miliband claims there is 'no more important' issue for him, they are deliberately setting a bar against which they know they will be measured. They are highlighting action that has already been taken and signaling the direction of travel is towards more climate action, not less.
There are a few anomalies in the form of the US Republican Party, the governments of Australia and Canada, a handful of Middle Eastern dictatorships, and a hardy rump of Anglo Saxon neoliberal ideologues, but the dominant political response to climate change now is a recognition of the scale of the problem and a commitment to act. Smart businesses and investors understand this, which is why they are downgrading coal firms, divesting from carbon intensive projects, and directing R&D dollars at clean tech.
One thing that has been particularly notable the past few days is the extent to which the climate dismissing commentariat has been roundly rejected as a side show, an irrelevance. The Global Warming Policy Foundation (GWPF) likes to position itself as one of the UK's most successful and influential lobby groups. Well, over the past five years, during a period when the one mainstream political party with MPs that have some degree of sympathy for its analysis has been in power, more ambitious emissions targets have been set, clean energy investment has reached record levels, an Energy Act has passed tilting the market in favour of decarbonisation, even heavy industry groups are supporting climate regulations, and the Prime Minister has declared he regards climate action as one of his top priorities. If this is success for the GWPF, imagine what failure would look like - we'd probably be living in a green utopia by now.
The UN summit provided a useful reminder that the movement in favour of action on climate change is gathering momentum fast, and there is little detractors can do about it. That is why growing numbers of the world's most successful business leaders are trying to exploit the opportunities offered by this transition, rather than attempt to stop it in its tracks.
The second encouraging development this week is the gradual realisation that the various pledges to tackle climate change are not empty rhetoric. Green campaigners are entirely justified when they say climate policy action rarely matches the oratorical commitments made by world leaders - policies rarely go far enough. But it is unfair to suggest climate policies aren't being introduced.
Obama may have disappointed his base, but he has overseen a significant reduction in US emissions, mobilised clean tech investment, and introduced new rules governing emissions from vehicles and power plants. It may not be good enough, but it is not nothing. The EU has delivered even more progress with its renewable energy deployment and its carbon market, and perhaps most significantly China has established itself as the world's largest clean tech market in double-quick time. All around the world there is an expanding portfolio of successful climate change policies that suggest global emission reductions can be delivered without harming development prospects.
Which leads to the third and most important point: for the first time the political leaders promising climate action have the cover they need. Globally, public opinion is firmly in favour of climate action, as long as it can be delivered without compromising living standards. Meanwhile, economists and business leaders are increasingly convinced emissions can indeed be reduced without undermining economic growth. The landmark New Climate Economy report is the culmination of five years of thinking that has demonstrated time and again that green growth is possible. Political and business leaders are starting to recognise the credibility of this argument, aided by the compelling evidence that clean energy costs are starting to undercut fossil fuel costs.
Unlike at Copenhagen, the real world evidence that a genuinely green economy can be delivered is emerging, giving politicians far more confidence they won't get crucified by their electorates for signing up to a green economic transition.
The fourth lesson from the past few days is, sadly, the least encouraging. There has to be a recognition that none of the policies and pledges being put forward goes far enough. Global emissions keep rising and climate risks keep escalating. If, like me, you intend to spend a few more decades on this wonderful planet, the latest emissions data released this weekend is truly terrifying. We are running out of time and the consequences could be grave.
Meanwhile, the domestic challenges that stop political and business leaders delivering on their international climate commitments remain present and correct. It was depressing in the extreme to see someone in Number 10 briefing that Cameron's speech would talk up shale gas, when the actual speech gave fracking the most cursory of mentions. Given the gravity of Cameron's speech, the transparent (and successful) attempt to engineer a UKIP appeasing headline in the Telegraph was a shoddy piece of political triangulation. It was similarly depressing to consider how Obama will never be able to get Congress to support his climate ambition or wonder how many of the blue chip firms calling for bolder climate action are themselves continuing to defend utterly unsustainable business models. The hypocrisy evident in Cameron calling for an end to fossil fuel subsidies while dishing out oil and gas tax breaks, or in Obama calling for more action from developing nations when US per capita emissions remain off the charts, or in Shell hymning the need to emissions cuts while exploring in the Arctic, is both shocking and in no way surprising.
Additionally, there is a little noticed reason why people are suddenly optimistic that a global climate deal can be reached next year: the most powerful nations have, in effect, given up on delivering a sufficiently ambitious treaty. The plan for nations to come forward with their emissions reduction pledges and climate action plans in order to provide a basis for a new treaty may help end the deadlocks that have marred previous negotiations, but it is not a recipe for an agreement to keep temperature rises below 2C. Like an Ed Miliband conference speech, the eventual treaty will not be commensurate to the scale of the challenge and will inevitably disappoint plenty of people who would love to be able to cheer it to the rooftops.
And yet, there is another, more encouraging, way to look at this continued failure to deliver deep cuts in emissions. Assuming you are not so cynical as to believe the words of political and business leaders can never be believed (if you are, I can't help you), the over-arching commitment to climate action is there, meaning that if the initial policies and pledges fall short the pressure is on to ratchet them up as the green economy gains momentum and the climate risks become more evident. This might not be the ideal approach - it leads to huge climate risks and higher economic costs compared to earlier action - but it further underlines how the direction of travel is in favour of more climate policy, not less; more clean technology, not less; and more green investment, not less.
This week's UN summit may not have delivered the global climate commitments many green businesses want, and Paris may similarly fail to deliver a truly credible treaty. Similarly, corporate sustainability strategies may continue to typically fall short of the scale of transformation that is required in a genuinely low carbon economy. But if there is one message to come from New York this week it is that when it comes to climate action, you ain't seen nothing yet.
If, as Woody Allen once joked, 80 per cent of success is showing up, next week's New York Climate Summit will get off to a great start. The meeting may have been dealt a blow by the hugely disappointing news that China's Xi Jinping and India's Narendra Modi will not make the trip, but more than 100 world leaders will be there, and – just as importantly – an even greater number of top-level business leaders will be in attendance.
As we report today, the corporate guest list for the UN meeting makes it one of the biggest gatherings of genuine A-grade, one per center, corporate titans in recent years – even the Bilderberg Group would struggle to get this lot in the same room. Senior bosses from 3M, ABB, Air France, BT, Barclays Bank, Sinopec, HSBC, IKEA, General Mills, Volvo, Philips, KPMG, International Airlines Group, The Coca-Cola Company, Unilever, Royal Dutch Shell, EDF, GDF Suez, Marks & Spencer, and McDonald's will be there, to name but a few. They will be joined by institutional investors who together manage more than $24tr (£14.6tr) of assets, not to mention numerous business-focused think tanks, campaign groups, and other institutions.
Unfortunately, Woody Allen was wrong – when it comes to climate change action, turning up is nowhere near 80 per cent of the battle. But the attendance of so many of the world's most powerful, influential, and successful businesspeople at a meeting on climate change is still worthy of note. This quite simply would not have happened even five years ago. The scale of corporate support for bold and ambitious climate action has never been bigger and it is growing all the time.
Now, there are voices – vocal and effective voices – who will argue that the close involvement of the corporate jet class in climate change negotiations is a big part of the problem. These voices will be out in force at the major climate marches planned for this weekend and they will dominate the airwaves with their condemnation of "big business". Moreover, while it may be hard for many business execs to swallow, they will have a point.
Some of the businesses now joining the ranks of campaigners calling for much more ambitious climate action have done, and continue to do, some terrible things to the environment. Their various pledges calling for emissions reductions amount to little more than greenwash and any credit they gain for their membership of green business groups is more than cancelled out by their continued involvement with groups that campaign for carbon-intensive business-as-usual. The contortions the fossil fuel industry is tying itself into as it attempts to dismiss carbon bubble concerns and talk up its relatively negligible investments in clean tech are a case in point. The hypocrisy is astounding and those involved deserve to be called out for it.
And yet, the justification for the heated criticism multinationals will inevitably attract this coming week extends only so far. The business community may have played a key role in pushing the world towards a climate crisis but, as I've argued many times before, the business community is no more homogenous than any other community of people. Yes, there are business leaders who wish to dismiss climate risks and oppose any and all environmental regulation. But there are plenty who want serious and effective action on climate change and accept regulations are part of that. Yes, there are businesses that are engaged in greenwash and use their involvement in climate negotiations to try to slow down progress. But there are plenty who genuinely want to drive the development and adoption of clean technologies as quickly as possible. Yes, there are businesses that lobby for carbon markets and prices on nature because they see an opportunity to game the system. But there are plenty who argue, with a lot of justification, that market-based mechanisms are the quickest and most effective means of building a more sustainable economy.
What is notable about the companies preparing to gather in New York is the extent to which they are breaking with the past and are willing to publicly demonstrate there is a massive corporate constituency that wants to see decarbonisation happen, and happen fast. It is important the public, the media, and politicians recognise the position many of the world's largest companies have taken in supporting climate action. In-depth research showing that economies benefit from decarbonisation, such as this week's New Climate Economy report, is also hugely important. But the impact business leaders can have through their endorsement of these arguments shifts the case for climate action from the theoretical to the practical. Crucially, it also gives politicians the cover they need to deliver the more ambitious long-term climate policies business leaders actually want.
Of course, you can choose to be sceptical about all this and assume some of these companies are guilty of triangulation, simply hedging their bets by publicly calling for climate action while privately lobbying against specific climate policies – and there is no doubt that some are doing this. But sometimes you also need to take people's claims at face value. If many of the world's largest investors say they want a price on carbon, then they want a price on carbon. If many of the world's most powerful businesses say they want a hugely ambitious global climate change deal, then they want a want a hugely ambitious global climate change deal. Their intervention makes it much easier for political leaders to deliver these policies. If you doubt that, imagine how much harder it would be to deliver climate action if these businesses were silent on these issues, or worse still, continuing to spout climate-sceptic nonsense.
Inevitably, there is a hugely long way to go before the world's blue chips can declare themselves truly sustainable. The contradictions evident within almost all these businesses remain painfully self-evident. For example, regardless of their various arguments in favour of a transition towards lower-carbon fuels, it is hard to see how Shell can square its support for climate action with drilling in the Arctic.
But while some of the criticism businesses face from the green community is justified, it is important to remember, as campaigners ready their placards, that it has been businesses and governments working together that have delivered the clean technologies that offer the only route towards decarbonisation. I am yet to read Naomi Klein's widely praised new book on climate change, but as I prepare to pick up a copy I am still unconvinced that overthrowing the capitalist system offers a more effective means of building a green economy than reforming those parts of the capitalist system that drive unsustainable business models.
In declaring that they are up for these reforms, the growing numbers of corporate giants who are backing climate action have delivered a historically significant transformation in what we understand as the business community. They have shown businesses can act in the global and social interest, because it is in their interest too. That they can embrace effective regulation, because they know it drives innovation. That they can recognise long-term risks, because they know some things matter more than the next quarter. Some may be guilty of hypocrisy and corporate spin, but it is my firm belief that most are entirely genuine in their desire to build a better and greener economy.
These business pioneers have also left the corporate dinosaurs and rent-a-quote neoliberal corporate lobbyists looking ever more tired and isolated, consigning the myth that "big business" is somehow inherently against action on climate change to the rubbish dump where it always belonged. What is more, they have achieved all that just by turning up.
You would be forgiven for feeling confused. On one hand there are yet more credible reports highlighting the unanswerable wisdom of green growth and sustainable economic development, and on the other there are yet more warnings about the escalating climate risks we face and the deeply flawed environmental policies we are lumbered with. In the past week the cognitive dissonance with which everyone working in the green economy lives has reached deafening levels.
The landmark New Climate Economy report, released today and backed by a battalion of leading economists, financial institutions, and businesses, provides the most compelling insight to date into how we can decarbonise the global economy in a way that actually helps us meet other economic goals such as development, security, and poverty alleviation. Its findings largely echo those of the UK-wide analysis published last week by WWF, which similarly showed how decarbonisation and economic growth are not only compatible, but extremely desirable when you consider the health and security benefits that are often ignored through narrower economic impact assessments.
And yet these encouraging bookends to the past week bracketed the usual flurry of deeply depressing environmental stories. New figures confirm global concentrations of atmospheric carbon dioxide are higher than ever before and there are worrying signs that emissions are spiking again as the global economy recovers. At the same time, a major new study by those notorious hippies at PwC reiterates yet again that the pace of decarbonisation is nowhere near fast enough to avoid dangerous levels of climate change. Meanwhile, at a national level, MPs are slamming the government for failing to deliver on green promises and analysts are warning the renewables investment climate is worsening.
All of which raises some important questions: if the economic benefits of aggressive action on climate change are so self-evident – and there is a growing body of credible evidence to suggest they are – why are we still failing to take the necessary action? How can politicians hymn the need for climate action one minute and promise to build a nation on maximised oil production the next? How can businesses identify climate change as an existential risk and pledge to invest in developing a technology-led response and then reportedly fail to deliver on those investment pledges?
With next week's People's Climate March and UN meeting in New York and Naomi Klein's high-profile new book on climate risk about to be released, climate change is enjoying one of its periodic media "moments" and as such there are plenty of potential answers to these crucial questions doing the rounds. They range from Klein's contention that the current neo-liberal capitalist system is incompatible with effective action on climate change to the charge that we simply face a failure of political and business leadership and as such the right mix of leaders can deliver the carbon pricing and clean technologies we urgently need within the current economic framework. Consequently, we face a similarly wide spectrum of recommended courses of action, ranging from (peaceful) revolution to one last push to prove the viability of clean technologies and ensure green economic arguments win out.
For what it is worth, my view is that the main stumbling block remains our deeply vexed relationship with long and short termism. You may wish to contest some of the New Climate Economy's claims that green growth is more cost effective than business-as-usual, but it is impossible to contest the evidence that shows energy-efficiency measures and agricultural best practices deliver massive savings, higher yields, and economic benefits. We've always known this, and yet we still live in a world where billions of dollars' worth of energy and food are wasted every month. Why is this? Because there are always more pressing short-term problems to deal with before you can get around to insulating the loft or installing better irrigation systems. It is the exact same 'put it off until tomorrow' mentality that sees a country neglect constitutional issues for generation after generation, until part of that country decides it has had enough and suddenly converts those self-same issues from a long-term to a short-term concern. Yes, we're talking about you, Scotland.
Overshadowing all these arguments is the rarely acknowledged reality that decarbonisation and climate adaptation is so staggeringly hard to deliver. Some environmentalists are occasionally guilty of forgetting that we are talking about the rapid re-organisation of an entire global economic and technological system. It is remarkable this even needs saying, but decarbonisation is not a small undertaking. In fact, it is unprecedented in its scale and complexity. There are encouraging precedents for drastic socioeconomic change, but none faced the intricacy of a modern global economy, nor quite such an imminent deadline.
What is so interesting about the New Climate Economy report (and, in fairness, other recent reports on green economics such as last week's WWF report) is that it understands this complex context and doesn't simply re-tread the arguments in favour of decarbonisation, instead focusing to a large extent on how best to deliver this transition. And it is in its framing of the next 15 years as a succession of choices between high and low-carbon development paths that the report is both at its most compelling and has the greatest resonance for business leaders.
According to the report, $90tr (£55.5tr) will be invested through to 2030 in new urban, energy and land use infrastructure and our ability to avoid dangerous levels of climate change depends on the choice we make between investment in new clean technologies or investment in the dirty technologies of the past century. Inevitably, the technologies of the past century are cheaper up front, but they are also less functional and fail to deliver the long-term savings and benefits offered by clean technologies. We are being asked to choose between an iPad and a second-hand typewriter from a charity shop. Or, to make the analogy more explicit, between ultra-efficient LED lighting in your office or traditional strip lighting. In this context, it is remarkable that so many of us are continuing to make dumb choices.
As the report makes plain, "business-as-usual" is an illusion. The past is not always the best guide to the future, new technologies and risks means economic and development models can and do change. There may be reassuring comfort in investing in technologies and infrastructure that worked in the past, but faced with a choice between a cleaner, better and more cost-effective technology and a polluting and insecure incumbent technology, no rational person would opt for the status quo. The New Climate Economy report crystallises the realisation that many political and business leaders have made in recent years that a greener economy is not just greener, but better.
Of course, the necessary low-carbon investment choices become a lot simpler if the cost of clean technology continues to fall and if governments deliver effective and stable decarbonisation policies backed up by consistent rhetoric, and as such green businesses must continue to increase investment in clean tech R&D and lobby long and loud for better policies. But the report makes it blindingly clear that the right choices can and should be being made now in cabinet rooms and boardrooms around the world, not least because in the short and long term green investments deliver better returns for all. Greener city-planning makes sense, more sustainable agricultural practices make sense, switching off coal-fired power stations makes sense, just as more efficient offices, electric vehicle fleets, and onsite energy generation make sense at an individual business level.
The contradictory developments that dominate environmental headlines may be confusing, but make no mistake, the arguments in favour of the green economy are being won, as the World Bank, the IMF and the vast majority of the world's governments and multinationals now accept. For all its complexity, the climate change challenge now for business leaders is simple: they need to make the right choices.
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Previously known as the BusinessGreen Blog, James' Blog features musings, observations and occasional rants from BusinessGreen editor James Murray
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